The Philippine banking sector continued to show resilience and steady growth as bank lending expanded by 10.5% in September, underscoring sustained credit demand and stable financial conditions despite global uncertainties.
Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that outstanding loans from universal and commercial banks (U/KBs) grew 10.5% year-on-year in September, slightly slower than August’s 11.2% pace. Adjusted for seasonality, bank lending rose 0.3% month-on-month, indicating continued credit expansion across industries.
Loans to residents climbed 10.9%, while loans to non-residents saw a slower decline of 2.9%, compared with a 5.9% drop in August.
Business lending, which accounts for the bulk of banks’ loan portfolios, increased by 9.1% in September from 9.9% in the previous month. Key growth sectors included:
- Electricity, gas, steam, and air-conditioning supply (27.1%)
- Transportation and storage (15.4%)
- Real estate activities (9.2%)
- Wholesale and retail trade (9.1%)
- Financial and insurance activities (8.8%), and
- Information and communication (8.6%)
Consumer loans remained robust, climbing 23.5% year-on-year, driven largely by sustained demand for credit card, auto, and salary loans.
The BSP said it continues to monitor bank lending closely, noting that loans remain a key channel through which monetary policy supports economic activity. “Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives,” the central bank said in a press release.
Solid banking performance in first half of 2025
The latest data reinforces the continued growth momentum and soundness of the Philippine banking sector, which the BSP highlighted in its Report on the Philippine Financial System for the First Semester of 2025.
According to the report, total banking assets rose 7.7% year-on-year to ₱28.2 trillion as of June 2025, supported by stable deposits, strong capital buffers, and ample liquidity. Loans and investments remained the largest contributors to asset growth, reflecting sustained business and consumer activity.
BSP Governor Eli M. Remolona, Jr.
Bank profitability also improved, with sector-wide net income increasing 4.1% year-on-year to ₱198.1 billion in the first half of 2025 — a testament to prudent risk management and effective credit governance.
BSP Governor Eli M. Remolona, Jr. said the sector’s solid performance demonstrates its resilience and adaptability amid rapid technological change.
“The banking system’s solid performance underscores its strength in seizing opportunities, navigating emerging risks, driving innovation, and championing inclusive and sustainable growth,” Remolona said.
He added that the BSP will continue implementing policies to reinforce financial stability and ensure that banks are able to “support economic activity and respond to the evolving needs of Filipinos.”
Digitalization and resilience at the core
Beyond strong balance sheet indicators, the BSP report also spotlighted key structural reforms aimed at future-proofing the financial system. These include initiatives to:
- Enhance the credit information system,
- Strengthen anti-money laundering and counterterrorism financing frameworks,
- Introduce digitalized retirement savings accounts, and
- Establish a Financial Cyber Resilience Governing Council to boost defenses against cyber threats.
The BSP said these efforts reflect its commitment to collaboration with supervised entities, other regulators, and industry associations to enhance the resilience and inclusiveness of the Philippine financial system.
A positive outlook for banking
With credit expansion supporting business recovery and bank profitability remaining solid, analysts say the Philippine banking industry is well-positioned to sustain growth in 2026 — aided by digital transformation, stable liquidity, and improving investor confidence.
As fintech adoption accelerates and consumer borrowing remains strong, the BSP’s steady policy stance and reform agenda are expected to keep the sector on track toward a more inclusive, technology-driven financial ecosystem.
