<\/p>\n
By Katherine K. Chan, <\/b>Reporter<\/i><\/p>\n
PHILIPPINE BANKS\u2019 lending <\/span>to businesses and consumers <\/span>marked its fastest expansion in seven months in March, supported by robust liquidity within the economic system despite the Middle East conflict, preliminary Bangko Sentral ng Pilipinas (BSP) data showed.<\/p>\n Outstanding loans of universal and industrial banks, net of reverse repurchase agreements, grew by 10.7% to P14.603 trillion as of March from P13.192 trillion in the identical month last yr.<\/p>\n This was faster than the revised 9.6% climb in February and was the quickest growth in loans for the reason that 11.2% in August last yr. <\/span><\/p>\n On a seasonally adjusted basis, big banks\u2019 lending activities rose by 1.7% month on month.<\/p>\n \u201cLoans from universal and industrial banks grew at a faster pace in March 2026, providing even stronger support for production activities of companies and consumption of households,\u201d the central bank said in an announcement late on Monday.<\/p>\n Outstanding loans to residents went up by 11.1% yr on yr to P14.299 trillion as of March from P12.869 trillion. This was an improvement from the revised 10.2% increase in February.<\/span><\/p>\n Many of the loans were those meant for production activities, which climbed by 9.7% to P12.322 trillion from P11.228 trillion.<\/p>\n This expansion in production loans was driven by the 26.7% increase in lending to the electricity, gas, steam, and air-conditioning supply industry. Other segments that showed growth were transportation and storage (19.4%); wholesale and retail trade, repair of motorized vehicles and motorcycles (9.3%); and real estate activities (8.8%).<\/p>\n Meanwhile, outstanding consumer loans to residents rose by 20.5% to P1.977 trillion as of March from P1.641 trillion a yr ago, barely easing from the 20.8% expansion in February. These include bank cards, motorized vehicles, and general-purpose salary loans but exclude residential real estate loans.<\/p>\n BSP data showed that bank card loans jumped 27.9% to P1.229 trillion from P960.55 billion within the prior yr, while loans for motorized vehicles grew by 12.5% to P538.286 billion from P478.67 billion.<\/p>\n Outstanding salary loans were at P166.934 billion as of March, up 4.2% from P160.273 billion a yr prior.<\/p>\n Alternatively, outstanding loans to nonresidents, including those disbursed by big banks\u2019 foreign currency deposit units, declined by 5.9% to P303.993 billion in March from P323.028 billion a yr earlier. This was smaller than the 13.9% drop logged in the identical month in 2025.<\/span><\/p>\n Michael L. Ricafort, chief economist at Rizal Industrial Banking Corp., attributed the faster lending growth in March to demand for financing from businesses as they desired to make their payments ahead of time in anticipation that prices and rates of interest would go up further amid the Middle East conflict.<\/span><\/p>\n \u201cThe continued double-digit growth in bank loans\u2026 was partly attributable to some hedging, stockpiling, and investment activities that must be financed before rates of interest and costs go up further attributable to the war within the Middle East,\u201d he said in an e-mail.<\/p>\n The Monetary Board last month hiked benchmark rates for the primary time in over two years to rein in surging inflation attributable to the worldwide oil price shock brought by the war between the US and Iran, bringing the policy rate to 4.5%.<\/span><\/p>\n BSP Governor Eli M. Remolona, Jr. has also signaled more modest increases ahead because the conflict drives up price expectations. The central bank now sees headline inflation averaging 6.3% this yr, well above its 2%-4% tolerance band, <\/span>because the oil crisis stokes domestic costs.<\/span><\/p>\n Meanwhile, the pickup in each bank lending and liquidity in March reflects robust domestic demand and ample money supply despite the conflict, Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said.<\/span><\/p>\n \u201cBank lending growth accelerated to 10.7%, driven largely by business borrowing in key sectors corresponding to energy, transport, trade, and real estate \u2014 pointing to ongoing capability expansion, working capital buildup, and project implementation,\u201d he said via Viber. \u201cMeanwhile, consumer lending remained strong, with growth still above 20%, indicating that household spending continues to be supported by regular income conditions and easing inflation.\u201d<\/p>\n \u201cImportantly, the info suggest that credit and liquidity conditions remain largely domestically driven, with the Middle East conflict having limited and indirect impact on local financial intermediation to this point.\u201d<\/p>\n In the approaching months, banks will likely maintain their lending activities, but growth may slow barely attributable to base effects, global uncertainties and high borrowing costs, Mr. Asuncion said.<\/p>\n \u201cThe foremost drivers will proceed to be corporate borrowing tied to infrastructure and trade activity, resilient household credit demand, and public sector financing, all of which should keep liquidity conditions adequate and sustain <\/span>near-term economic momentum.\u201d<\/span><\/p>\n Several banks have signaled that they may tighten their lending standards and turn out to be more prudent when granting credit attributable to the high level of uncertainty surrounding the Middle East conflict. Lenders have also ramped up their provisioning to guard themselves from possible asset quality risks.<\/p>\n The central bank monitors banks\u2019 lending activities to trace the transmission of monetary policy.<\/p>\n \u201cLooking ahead, the BSP will make sure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives,\u201d the BSP said.<\/p>\n FASTER MONEY SUPPLY GROWTH This was the fastest expansion in five-and-a-half years or since September 2020, when it rose by 12.2%.<\/p>\n Domestic liquidity or M3 \u2014 a measure of the sum of money within the economy that features currencies in circulation, bank deposits, and other financial assets easily convertible to money \u2014 rose to P20.365 trillion as of March from P18.181 trillion within the previous yr.<\/span><\/p>\n Month on month, M3 inched up by 1.7% on a seasonally adjusted basis.<\/p>\n \u201cDomestic liquidity growth was driven primarily by the continued expansion in borrowings by nonfinancial private corporations and households,\u201d the BSP said.<\/p>\n Mr. Asuncion said credit growth within the private sector, stable net foreign asset (NFA) positions, and increased government borrowings supported the expansion in domestic liquidity.<\/p>\n Domestic claims, which include those from private and government sectors, got here in higher by 11.5% to P23.068 trillion in March from P20.685 trillion within the previous yr.<\/p>\n This as claims on the private sector stood at P14.804 trillion in the course of the month, with growth quickening to 11.8% from 10.6% in February.<\/p>\n Meanwhile, the central government\u2019s increased issuances of presidency securities boosted its net claims to P6.258 trillion, up 12.1% yr on yr from P5.581 trillion.<\/p>\n Claims on a sector confer with that sector\u2019s liabilities to depository corporations corresponding to banks and the central bank.<\/p>\n Preliminary BSP data also showed that NFAs in peso terms grew by 8.6% to P7.391 trillion from P6.808 trillion a yr prior.<\/p>\n The central bank\u2019s NFAs edged up by 4.9% to P6.445 trillion, while banks\u2019 NFA position climbed by 4.2% to P946.141 billion amid lower foreign currency-denominated bills.<\/p>\n NFAs reflect the difference between depository corporations\u2019 claims and liabilities to nonresidents.<\/p>\n Meanwhile, the narrower measure of cash supply or M1, which is made up of currency in circulation and current account deposit liabilities, rose by 9.4% yr on yr in March, picking up from the 8.5% increase in February.<\/p>\n<\/p><\/div>\n <\/p>\n","protected":false},"excerpt":{"rendered":" PHILSTAR.COM\/IRISH LISING By Katherine K. Chan, Reporter PHILIPPINE BANKS\u2019 lending to businesses and consumers marked its fastest expansion in seven months in March, supported by robust liquidity within the economic system despite the Middle East conflict, preliminary Bangko Sentral ng Pilipinas (BSP) data showed. Outstanding loans of universal and industrial banks, net of reverse repurchase […]<\/p>\n","protected":false},"author":1,"featured_media":333829,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[41230,3431,2047,5069,8051],"class_list":["post-333828","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-7month","tag-growth","tag-high","tag-loan","tag-march"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/333828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/comments?post=333828"}],"version-history":[{"count":2,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/333828\/revisions"}],"predecessor-version":[{"id":333831,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/333828\/revisions\/333831"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/media\/333829"}],"wp:attachment":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/media?parent=333828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/categories?post=333828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/tags?post=333828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
<\/b>Liquidity growth also picked up in March to 12% from 10.3% in February, in response to separate central bank data.<\/p>\n