The 11.2 percent year-on-year increase in lending by Philippine commercial and universal banks in April, while slower than in previous months, is still the fastest in more than two years, the chief economist from RCBC said on Sunday.
“It is still a good sign for the economy,” RCBC’s Michael Ricafort said.
It is more than twice faster than the first quarter gross domestic product (GDP) growth of 5.4 percent,” he said, referring to the country’s first-quarter economic growth.
Lending by big Philippine banks expanded by 11.2 percent to P13.25 trillion in April from P11.91 trillion a year earlier, the Bangko Sentral ng Pilipinas (BSP) said late Friday.
The rate of increase in April slowed from 11.8 percent in March.
Lending activities by commercial and universal banks slowed in April, as commercial and industrial borrowers did not borrow as much as they did, the BSP reported over the weekend.
“Loans for production activities grew by 10.3 percent in April from 10.8 percent in March,” the central bank said.
“Loan growth eased due to the slower expansion in lending to key industries,” it said.
The key industries referred to are real estate, wholesale and retail trade, motor vehicle repair shops, manufacturing, financial and insurance activities, information and communication, and transportation and storage.
Consumer loans were up 24 percent in April from 23.9 percent in March, driven by an increase in credit card loans.
Ricafort said consumer loans grew by “about twice the average loan growth and more than four times GDP growth.”
“The country’s consumer loans-to-GDP ratio at more than 11 percent is still relatively lower compared with other more developed Asean countries,” Ricafort said, referring to the Association of Southeast Asian Nations.
Bank lending will improve as the impact of the BSP monetary policy stance would lead to lower borrowing costs, he said.
The latest BSP cut in the banks’ reserve requirement ratio, which took effect on March 28, 2025, would have infused about P330 billion into the banking system.
“This would have increased banks’ loanable funds and could also reduce intermediation costs and overall lending rates,” Ricafort said.
“This would further lead to faster loan growth in the coming months,” he added.
The BSP said it aims to ensure that domestic liquidity and bank lending conditions remain in line with its price and financial stability mandates.
