BIG BANKS’ loan growth slowed to a fourth-month low in June as businesses turned cautious and consumer demand weakened amid difficult macroeconomic conditions, the Bangko Sentral ng Pilipinas (BSP) said.
Central bank data released on Friday showed that universal and industrial banks’ outstanding loans, net of reverse repurchase agreements, rose by 9.8% to P14.882 trillion at end-June from P13.553 trillion a yr prior.
This eased from the 12.1% climb in May and was the slowest annual loan growth in 4 months or for the reason that 9.6% in February.
“Growth in loans from universal and industrial banks (U/KBs) eased in June, reflecting cautious borrowing by firms and subdued consumer demand,” the BSP said in a press release.
Lending to residents went up by 10.3% yr on yr to P14.593 trillion from P13.231 trillion previously, easing from the 12.6% rise to P14.692 trillion in May. This accounted for the majority of the full loans.
Banks lent P12.545 trillion for residents’ production activities, 9.2% higher than P11.493 trillion last yr.
Nevertheless, the rise was slower than the 11.7% jump seen in May, which the BSP attributed to subdued lending to major borrowing sectors reminiscent of construction, education, and other service activities.
Loans for residents’ business activities were largely driven by sustained demand from real estate; electricity, gas, steam, and air-conditioning supply; wholesale and retail trade, and repair of motorcars and motorcycles; manufacturing; transportation and storage; and agriculture, forestry, and fishing, it added.
Meanwhile, big banks disbursed P2.048 trillion in consumer loans, 17.8% greater than the P1.738 trillion recorded as of June 2025, easing from the 19% increase the prior month.
“This was because of slower growth in bank card and motorized vehicle loans, suggesting a more measured pace of household borrowing,” the central bank said.
Bank card loans jumped by 24.9% yr on yr to P1.294 trillion in June, easing from the 26.3% rise logged a month earlier.
Loans for motorcars increased by 8.6% to P540.118 billion, also slower than 10.2% in May.
Salary loans stood at P177.994 billion as of June, up 9.9% from last yr and faster than the 6.4% growth in May.
However, nonresidents’ outstanding loans hit P288.935 billion at end-June, 10.2% lower than P321.66 billion last yr. This was larger than the 8.3% decline the prior month.
The BSP monitors banks’ lending activities to trace the transmission of monetary policy.
LIQUIDITY GROWTH EASES
Meanwhile, the country’s money supply growth also eased in June to log the slowest expansion in 4 months amid weaker lending activity, the central bank said.
Domestic liquidity or M3 stood at P20.51 trillion as of June, 10.6% higher than P18.547 trillion last yr but down from the P20.604 trillion in May, based on preliminary data.
This year-on-year growth was the slowest since February, or when M3 rose by an annual 10.3%.
Month on month, domestic liquidity declined by 0.7% on a seasonally adjusted basis.
“The newest expansion in M3 eased from 12.8% within the previous month amid slower growth in credit activity,” the BSP said.
M3 measures the amount of cash within the economy that features currencies in circulation, bank deposits, and other financial assets easily convertible to money.
“Borrowings by each the private and public sectors remained the most important drivers of M3 growth,” the central bank said. “Bank lending continued to channel funds to production sectors and households.”
Domestic claims, which include those from private and government sectors, got here in 10.9% higher at P23.464 trillion in June from P21.157 trillion a yr earlier. Nevertheless, this eased from the 13.3% rise in May.
Claims on the private sector also increased by 11.7% yr on yr to P15.192 trillion.
“The National Government’s issuance of debt securities and withdrawal of deposits from the BSP and banks to finance spending also supported domestic liquidity growth,” the BSP said.
The central government’s net claims, which accounts for its issuance of securities and withdrawal of deposits, amounted to P6.326 trillion in June, up 12.9% yr on yr from P5.602 trillion.
Claims on a sector confer with that sector’s liabilities to depository corporations reminiscent of banks and the central bank.
Meanwhile, net foreign assets (NFA) in peso terms edged up by 4.1% to P7.028 trillion in June from P6.748 trillion last yr. This was slower than the 9.1% rise in May as banks’ NFA position contracted by 12.1% to P631.76 billion from P718.879 billion a yr prior.
However, BSP data showed its NFA went up by 6.1% to P6.396 trillion from P6.029 trillion in June 2025.
NFAs reflect the difference between depository corporations’ claims and liabilities to nonresidents.
The BSP said it should be sure that local bank lending and domestic liquidity conditions “remain consistent with its price and financial stability objectives.” — Katherine K. Chan