Philippine banks’ lending growth slows in January

PHILIPPINE BANKS’ lending growth slowed to a near two-year low in January as outstanding loans continued to expand at a single-digit pace, preliminary central bank data showed.

- By Katherine K. Chan Reporter

Based on data released by the Bangko Sentral ng Pilipinas (BSP) late on Monday, universal and commercial banks’ total outstanding loans, net of reverse repurchase agreements, grew by 9.3% to P14.236 trillion in January from P13.02 trillion a year earlier.

This was the slowest pace seen in 23 months or since 8.7% in February 2024.

January’s loan growth was likewise slower than the revised 9.6% in December.

On a seasonally adjusted basis, bank lending grew by 1% month on month.

“The slowest bank loan growth in nearly two years is consistent with the slower economy largely brought about by government underspending especially on infrastructure amid the political noise or anomalous flood control projects since the latter part of 2025 that also weighed down on investments, many of which are financed by loans,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Meanwhile, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the slowdown in lending was mainly because both banks and borrowers have turned more cautious.

"High interest rates and global uncertainty are making banks more selective, while businesses are delaying expansion and focusing on cash flow," he said via Viber.

In January, big banks lent out a total of P13.939 trillion to residents, up 9.9% from the P12.689 trillion disbursed in the same month last year. Growth of loans for residents was slower than December's 10.06%.