Credit growth eases further in October

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December 6, 2025 | 12:00am

MANILA, Philippines — Credit growth eased for the fourth straight month to 10.3 percent in October from 10.5 percent in September, with loan demand moderating on softer business expansion and more cautious consumer activity.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that loans disbursed by universal and commercial banks amounted to P13.79 trillion in end-October, up by P1.28 trillion from the P12.51 trillion recorded in the same period last year.

The October credit growth marked the slowest in 16 months or since the 10.1 percent expansion in June 2024.

Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the downtrend highlights persistent headwinds.

“The slowdown reflects two things: lingering high borrowing costs and cautious sentiment amid uncertainty. Businesses are delaying expansion and consumers are prioritizing essentials,” he said.

He said that although the BSP’s rate cuts provide some relief, their impact hinges on improved confidence and liquidity.

Monetary easing must be paired with clear policy communication, while companies should prioritize strengthening
resilience and operational efficiency, Ravelas added.

“Loans meant to fund business activities grew at a steady rate of 9.1 percent (to P11.64 trillion)

in October,” the BSP said, citing increases in key sectors such as real estate, electricity supply and motor vehicle trade.

The growth in disbursements to the volatile real estate sector went up to 9.9 percent with P2.78 trillion, followed by the electricity, gas, steam and air-conditioning supply sector with a slower increase of 24.8 percent to P1.71 trillion.

The wholesale and retail trade, repair of motor vehicles and motorcycles booked an 11.7-percent increase to P1.58 trillion, faster than the 9.1-percent rise a month ago.

Other sectors that supported credit activity included financial and insurance (8.5 percent), information and communication (8.2 percent) as well as transportation and storage (13 percent).

However, consumer loans to residents increased at slower rate of 23.1 percent in October. This marked the weakest pace in more than two years or since the 22.6 percent clip in July 2023.

Credit card loans grew by 29.2 percent to P1.12 trillion while auto loans increased by 17.6 percent to P521.12 billion.

Salary-based general purpose consumption loans also stood at P163.35 billion as of October, 5.8 percent higher than a year ago.

“The BSP monitors bank loans because they are a key transmission channel of monetary policy. Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions are consistent with its price and financial stability mandates,” the central bank said.

In a separate data, the BSP reported an 8.3-percent increase in domestic liquidity to about P19.1 trillion in end-October. This was faster than the revised 7.6-percent increase in September.