By Katherine K. Chan, A reporter
PHILIPPINE BANKS’ lending growth almost halvedyear low in January as outstanding loans continued to grow at a single-digit pace, preliminary central bank data showed.
Based on data released by the Bangko Sentral ng Pilipinas (BSP) late Monday, global and commercial bank loans, net of repurchase agreements, grew 9.3% to P14.236 trillion in January from P13.02 trillion a year ago.
This was the slowest pace seen in 23 months or from 8.7% in February 2024.
January loan growth was also slower than the 9.6% revised in December.
Seasonally adjusted, bank lending grew by 1% month-on-month.
“The slow growth of bank loans in almost two years is accompanied by the slow pace of the economy which is mainly caused by the government’s low spending especially on infrastructure amid political noise or flood control projects from the last half of 2025 that are also burdened by investments, most of which are financed by loans,” said Rizal Commercial Banking Corp. Message from Chief Economist Michael.
Meanwhile, Jonathan L. Ravelas, a senior consultant at Reyes Tacandong & Co., said that the decrease in lending is because banks and borrowers have become more cautious.
“High interest rates and global uncertainty are making banks more selective, while businesses are slowing expansion and focusing on cash flow,” he said of Viber.
In January, central banks lent a total of P13.939 billion to citizens, up 9.9% from the P12.689 trillion issued in the same month last year. The growth of loans to residents was slower than December 10.06%.
Loans for resident productive activities reached about P12 trillion in January, up 8.2% from P11.089 trillion last year. This was a huge amount or 84.3% of the outstanding loans during the month.
Electricity, gas, steam and air-conditioning supply increased by 20.3%, followed by transportation and storage (19.1%), real estate activities (9.1%), wholesale and retail trade, automobile and motorcycle repair (8.3%), financial and insurance activities (5.5%), and information and communication (4.9%).
Meanwhile, consumer loans to residents, which was 13.6% of total loans, grew 21.3% year-on-year to P1.94 trillion in the first month of 2026 from about P1.6 trillion in 2025.
Credit card loans jumped 27.7% year-on-year to P1.2 trillion in January from P940.073 billion last year. Auto loans also increased by 14.9% to P530.285 billion in January from R461.658 billion, while salary loans increased by 5% to P165.724 billion from R157.893 billion last year.
Meanwhile, loans to non-residents reached P296.391 billion in January, down 10.4% year-on-year – more than the 8% decline revised in December.
“BSP monitors bank loans because it is an important channel of monetary policy,” the central bank said in a statement.
“Looking forward, the BSP will ensure that domestic credit and bank lending conditions remain consistent with its rates and financial stability mandates,” it added.
In the coming months, demand for loans could ease as uncertainty about the ongoing war in the Middle East could hurt business profit margins and consumer incomes, Mr. Ricafort.
Mr. Ravelas also said risks from high oil prices and market volatility during the war could push lenders and buyers to be more cautious.
The oil shock resulting from supply disruptions caused by the Middle East war has increased the risk of inflation in many oil-importing countries, including the Philippines. This has fueled talk that central banks are tightening monetary policy.
BSP Governor Eli M. Remolona, Jr. he said an oil price above $100 a barrel could bring inflation in the Philippines past 4%, prompting them to end their cycle of easing and rate hikes for the first time in two years.
“In the near term, lending may remain soft, but if inflation stabilizes and prices come down later, we could see a gradual consolidation – possibly starting with working loans instead of aggressive expansion,” said Mr. Ravelas.
MONEY MAINTENANCE
Various preliminary data from the BSP also showed that the economy had a net income of P19.711 trillion in January, an increase of 8.6% from P18.149 trillion in the same month in 2025.
This was the fastest growth of domestic funds (M3) seen in almost five years or since 9.5% in February 2021.
Month-on-month, M3 increased by 0.8% on a seasonally adjusted basis.
M3 is a measure of the amount of money in the economy that includes currencies in circulation, bank deposits, and other financial assets that are readily convertible to cash.
Domestic claims, which include those from the private and public sector, stood at P22.297 trillion, up 10% year-on-year from P20.275 trillion.
This, as the increase in loans to private non-financial corporations and households increased claims on private corporations by 10.6% to P14.466 trillion in January from P13.083 trillion last year.
Meanwhile, total claims to the central government rose 8.9% to P5.888 trillion in January from P5.406 trillion a year earlier due to higher borrowing.
Industry claims refer to the industry’s debts to depository institutions such as banks and the central bank.
Central bank data also showed that foreign assets (NFAs) in peso terms amounted to P7.545 trillion in January, up 10.2% from P6.844 trillion last year.
On the downside, central bank NFAs were up 9.2% year-on-year to P6.623 trillion, while bank NFAs jumped 18.1% to P922.863 billion.
NFAs show the difference between corporate claims and liabilities to non-residents.
