BANK lending and money supply grew at a slower pace in December, the Bangko Sentral ng Pilipinas (BSP) reported late on Monday.
Outstanding loans of universal and commercial banks (U/KBs) expanded by 9.2 percent based on preliminary data, down from November’s 10.3 percent and the slowest since February 2024’s 8.6 percent.
Month on month, outstanding U/KB loans fell by 2.0 percent after adjusting for seasonal fluctuations, the BSP said.
Domestic liquidity, meanwhile, grew by a lower 7.0 percent to P20.1 trillion from 7.6 percent a month earlier.
The amount of money circulating in the economy was broadly stable from November, the BSP said, again after adjusting for seasonal fluctuations.
Asked to comment, Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the easing in bank lending was “a natural cooling in credit demand.”
“Businesses have turned more cautious because of rising costs, softer government spending, and weaker confidence, which slowed loan growth,” he said.
Ravelas noted that while households were continuing to borrow, consumer credit was slowing as people grew more selective in their spending.
“The BSP’s rate cuts are working, but we’re now in the lag phase — last year’s tightening and fiscal slowdown are still weighing on activity,” he said.
“The stimulus is there; the economy just needs time and stronger demand for lending to pick up again,” he added.
Outstanding loans to residents grew at a slower 9.7 percent from 10.7 percent in November, while outstanding loans to nonresidents markedly fell by 8.1 percent from -4.5 percent.
Loans for business activities, on the other hand, grew by 8.0 percent.
In particular, lending expanded for real estate activities (8.3 percent); electricity, gas, steam, and air-conditioning supply (26.8 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (10.8 percent); and financial and insurance activities (3.9 percent).
Consumer loans, meanwhile, posted slower growth of 21.4 percent from 22.9 percent. This included credit card, motor vehicle and general-purpose salary loans.
As for liquidity, domestic claims rose by 10.1 percent in December, slowing from November’s 10.6 percent.
Private sector claims alone also grew by 10.1 percent, down from 11.1 percent, which the BSP said came as “bank lending growth to non-financial private corporations and households slowed.”
Net claims on the central government also saw growth edge down to 10.8 percent from 11.0 percent, primarily driven by higher borrowings.
Net foreign assets in peso terms rose by 6.1 percent from 4.4 percent.
As of the BSP increased by 5.3 percent, while those of banks rose amid larger holdings of foreign currency-denominated debt securities.
The BSP said it would “ensure that domestic liquidity and bank lending conditions remain consistent with its price and financial stability mandates.”