Lending by big banks, or universal and commercial banks (U/KBs), held steady in November 2025 as private consumption remained robust despite elevated borrowing costs, although lingering flood control issues threaten to weigh on banks’ lending confidence.

The latest data from the Bangko Sentral ng Pilipinas (BSP) showed bank lending held at the 10.3-percent growth rate seen in October 2025, marking the slowest expansion in one year and four months. This was the weakest growth since June 2024, when lending rose by 10.1 percent.

Broken down, growth in outstanding loans to residents slowed to 10.7 percent in November from 10.9 percent in the previous month, according to preliminary data from the BSP released Tuesday night, Jan. 13.

Meanwhile, the contraction in outstanding loans to non-residents moderated in November, dipping 4.5 percent from a double-digit drop in October. Outstanding loans to non-residents cover those extended by big banks’ foreign currency deposit units (FCDUs) to borrowers abroad.

Loans supporting business activities inched down to nine percent during the month.

A slowdown was evident across sectors such as real estate (nine percent from 9.9 percent), wholesale and retail trade, including vehicle repairs (11.6 percent from 11.7 percent), transportation and storage (12.7 percent from 13 percent), information and communication (seven percent from 8.2 percent), and financial and insurance activities (3.5 percent from 8.5 percent).

Meanwhile, bank lending for electricity, gas, steam, and air-conditioning supply expanded faster, rising 26.6 percent from 24.8 percent in October.

Notably, consumer loans to residents expanded more slowly at 22.9 percent, marking the weakest growth in more than two years since the 22.8-percent growth in October 2023. These include credit card, motor vehicle, and general-purpose salary loans.

Reyes Tacandong & Co. senior adviser Jonathan Ravelas said growth in bank lending was steady last November “because the core drivers of the economy are still moving—business loans stayed solid across real estate, utilities, trade, transport, and information and communications technology (ICT).”

He added that consumer lending remained the main driver of growth, with credit card and salary loans expanding by more than 20 percent.

“These are signs that spending hasn’t collapsed despite high rates,” Ravelas noted. “But for lending to really accelerate, we’ll need clearer signals of easing inflation and eventually lower interest rates.”

He said demand from businesses and households would pick up once borrowing costs begin to decline. The BSP has recently brought the key borrowing cost to 4.5 percent and signaled a nearing end to the easing cycle.

“What worries me is that the floodgate scandal risks slowing that momentum—not because credit fundamentals are weak, but because confidence can take a hit. When trust is shaken, investors hesitate, and banks become more cautious,” Ravelas further said.

“So the priority now is restoring credibility and strengthening transparency. If we fix that, and inflation continues to ease, lending growth can pick up more strongly by mid-2026,” he added.

Domestic liquidity, or the amount of money in the economy as measured by M3, expanded by 7.6 percent in November last year, hitting ₱19.4 trillion. This was 70 basis points (bps) slower than October 2025’s 8.3 percent, separate BSP data also released on Jan. 13 showed.

M3 is a broad measure of money supply that includes currency in circulation, bank deposits, and other financial assets that are easily convertible to cash.

Claims on the domestic sector—which cover both private and government borrowers—drove growth in the money supply, rising slightly faster at 10.6 percent in November from 10.5 percent in October.

Claims on a sector refer to the debts or obligations that banks and the central bank hold against that sector.

In particular, claims on the private sector increased by 11.1 percent, slightly faster than the 11-percent growth in the previous month. This expansion was driven by the “continued expansion in bank lending to non-financial private corporations and households.”

Meanwhile, net claims on the government accelerated to 11 percent during the month from 10 percent due to the government’s higher borrowings.