Preliminary data from the Bangko Sentral ng Pilipinas (BSP) reveals that both bank lending and domestic liquidity maintained their growth trajectory in October 2025. This sustained expansion underscores steady demand for credit from the private sector, supporting ongoing economic activity.
Bank Lending Shows Robust Growth Across Sectors
The central bank reported that the outstanding loans issued by universal and commercial banks (U/KBs) increased by 10.3 percent in October compared to the same month last year. This pace was marginally slower than the revised 10.5 percent growth recorded in September. On a month-on-month basis, after seasonal adjustments, lending activity still grew by 0.6 percent.
A closer look at the data shows a clear divergence between resident and non-resident borrowing. Lending to residents accelerated, posting a 10.9 percent year-on-year increase. In contrast, loans extended to non-residents contracted further, declining by 11.1 percent after a 2.9 percent drop the previous month.
Business and Consumer Credit Drive Expansion
The growth was fueled by continued credit support to key industries. Loans to businesses grew by 9.1 percent, with several sectors showing particularly strong performance:
- Electricity, gas, and water supply surged by 24.8 percent.
- Transportation and storage increased by 13.0 percent.
- Wholesale and retail trade rose by 11.7 percent.
- Real estate activities expanded by 9.9 percent.
- Financial and insurance activities grew by 8.5 percent.
- Information and communication saw an 8.2 percent rise.
On the consumer front, loans to residents—encompassing credit card debt, motor vehicle loans, and salary-based personal loans—remained a powerhouse. They expanded by 23.1 percent year-on-year, only slightly moderating from September's 23.5 percent growth rate.
Domestic Liquidity (M3) Accelerates
Complementing the credit growth, the country's domestic liquidity, measured by M3, also expanded at a quicker pace. The total money supply grew by 8.3 percent year-on-year to approximately ₱19.1 trillion in October. This was faster than the revised 7.6 percent expansion seen in September. Seasonally adjusted, M3 increased by 1.0 percent from the previous month.
The growth in liquidity was supported by increased claims on the domestic economy, which rose by 10.5 percent. A key driver was the 11.0 percent growth in claims on the private sector, up from 10.7 percent in September, mirroring the robust bank lending activity. Net claims on the central government also grew by 10.0 percent, reflecting increased government borrowing.
In peso terms, the country's net foreign assets (NFA) position improved by 2.1 percent. While the BSP's own NFA slightly decreased by 0.4 percent, the NFA of banks improved due to a decline in their foreign currency-denominated bills payable.
BSP Reaffirms Policy Stance
The Bangko Sentral ng Pilipinas emphasized that bank lending continues to serve as a primary channel for transmitting its monetary policy decisions. The central bank has vowed to keep managing liquidity and credit conditions to ensure they remain consistent with its primary goals of maintaining price stability and safeguarding financial system stability.
The BSP stated it will persist in its liquidity management operations to align financial conditions with its mandates for controlling inflation and promoting a stable economic environment. This data indicates a financial system that is actively supporting economic growth while operating under the watchful guidance of the monetary authority.
