PHL banks’ loan growth slows to near 2-year low

THE PHILIPPINE BANKING sector’s lending activity expanded at its slowest pace in nearly two years at the end of 2025 as loans for both consumers and business activities eased as a corruption scandal dampened sentiment, the Bangko Sentral ng Pilipinas (BSP) reported.

- - Katherine K. Chan

Based on preliminary BSP data released late on Monday, the total outstanding loans of universal and commercial banks, net of reverse repurchase agreements, grew by 9.2% year on year at end-December to P14.349 trillion from P13.138 trillion.

This was the slowest loan growth seen in 22 months or since 8.6% in February 2024.

It was also the first time since April 2024 that bank lending grew at a single-digit pace.

Month on month, the pace of lending eased from the 10.3% growth posted at end-November.

On a seasonally adjusted basis, bank lending fell by .2% month on month.

Outstanding loans to residents stood at P14.046 trillion by year-end, up by 9.7% year on year from P12.808 trillion. This was slower than the 10.7% expansion seen in November.

Lending for residents’ production activities accounted for the bulk or 84.4% of banks’ outstanding loans at the end of December. The rest were consumer loans (13.5%) and loans to nonresidents (2.1%).

BSP data showed that loans for production activities grew by 8% annually to P12.114 trillion last year from P11.216 trillion in 2024. This eased from the 9% growth seen in the 11 months to November.

This was driven by the 26.8% jump in lending for the electricity, gas, steam, and air-conditioning supply sector. Loans extended for wholesale and retail trade, repair of motor vehicles and motorcycles also grew by 10.8%, followed by real estate activities (8.3%) and financial and insurance activities (8.9%).

Meanwhile, consumer loans to residents reached P1.932 trillion at end-December, up 21.4% from P1.592 trillion a year ago. However, consumer loan growth eased from the 22.9% at end-November.