Lending by big banks, or universal and commercial banks (U/KBs), closed the first quarter on an upbeat note as it accelerated to a seven-month high in March, according to the Bangko Sentral ng Pilipinas (BSP).

This came as the sector provided “even stronger support for the production activities of businesses and the consumption of households,” the BSP said in a statement on Monday night, May 11.

The latest preliminary BSP data showed bank lending growth surged to 10.7 percent last March from a revised 9.6 percent in February. This marked the fastest lending growth in seven months since the 11.2-percent growth recorded in August last year.

Broken down, the growth in outstanding loans to residents increased to 11.1 percent in March from 10.2 percent in February.

Meanwhile, the contraction in outstanding loans to non-residents sharply narrowed to 5.9 percent compared to the 13.2-percent decrease seen last February. Non-resident loans include those extended by big banks’ foreign currency deposit units (FCDUs) to borrowers abroad.

Loans meant to fund business activities expanded by 9.7 percent during the month, up from 8.6 percent in February.

Growth across major industries remained robust. Electricity, gas, steam, and air-conditioning supply expanded by 26.7 percent, up from 23.6 percent last February. Wholesale and retail trade, including motor vehicle repair, grew by 9.3 percent, compared to 8.2 percent in the prior month.

Financial and insurance activities also saw faster growth at 4.4 percent, up from 3.9 percent.

Meanwhile, real estate activities slowed modestly to 8.8 percent from nine percent.

Consumer loans to residents—covering credit card, motor vehicle, and general-purpose salary loans—expanded at a slightly slower rate of 20.5 percent last March, down from 20.8 percent in February. This easing was due to a “slowdown in motor vehicle loans and salary-based general-purpose consumption loans.”

Separate BSP data showed that domestic liquidity (M3), the amount of money in the economy, grew by 12 percent in March to reach ₱20.4 trillion. This growth rate was faster than the 10.3-percent increase recorded last February.

M3 includes currency in circulation, bank deposits, and other financial assets easily convertible to cash.

Claims on the domestic sector remained a primary engine of money supply, rising by 11.5 percent last March from a revised 11.1 percent last February.

In particular, claims on the private sector grew by 11.8 percent in March, up from 10.6 percent, driven by continued bank lending to households and non-financial private corporations.

Meanwhile, net claims on the central government increased by 12.1 percent last March, fueled by higher government securities (GS) issuances.

Looking ahead, the BSP said it “will ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives.”