BANK lending and domestic liquidity both expanded in May, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday.
“Credit to production sectors and households, mainly in the form of bank loans, continued to grow and support economic activity,” the BSP said.Government debt issuance and withdrawals of deposits from the BSP and banks to finance public spending also boosted domestic liquidity.Outstanding loans of universal and commercial banks grew by 12.1 percent, preliminary BSP data showed, faster than April’s 11.4 percent and the strongest acceleration since February 2025’s 12.2 percent.Domestic liquidity (M3) also climbed at a quicker 12.8 percent to P20.6 trillion from 12.4 percent in April.Outstanding loans to residents went up 12.6 percent from 11.8 percent a month earlier, while loans for business activities gained 11.7 percent.Lending expanded across key sectors, including electricity, gas, steam and air-conditioning supply (32.9 percent), transportation and storage (21.4 percent), wholesale and retail trade, including motor vehicle and motorcycle repair (10.1 percent), real estate (7.3 percent) and manufacturing (6.4 percent).Consumer loans jumped by 19.9 percent, the BSP attributing the pace to slower growth in credit card and motor vehicle loans.“The BSP monitors bank loans because they are a key transmission channel of monetary policy,” the central bank said, adding that it would ensure lending conditions remain aligned with its price and financial stability objectives.Domestic liquidity growth was driven by a 13.3-percent increase in domestic claims, up from 12.7 percent in April.Private sector claims rose by 13.2 percent from 12.6 percent, while net claims on the national government increased by 16.2 percent from 15.1 percent.Meanwhile, net foreign assets in peso terms climbed by 9.1 percent from 8.9 percent in April.BSP net foreign assets rose by 8.2 percent, while banks’ net foreign assets increased mainly due to higher holdings of foreign currency-denominated debt securities.The BSP said it would continue to ensure that domestic liquidity remains consistent with its price and financial stability objectives.
