Bank lending up 10.3% in November despite subdued confidence

Bank lending grew at a steady pace in November 2025, with the expansion of credit to businesses and consumers flattening at a time when a deepening corruption scandal is weighing on confidence.

Outstanding loans provided by big banks rose 10.3 percent from a year earlier to nearly P14 trillion, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed, matching the pace of expansion in October.

This comes as the BSP presses ahead with an interest rate-cutting campaign aimed at supporting an economy weighed down by a widening probe into anomalous flood control projects. The graft scandal has exposed weaknesses in governance and stalled public works, bruising business and consumer confidence.

Since August 2024, the central bank has reduced its benchmark rate—which guides banks’ lending costs—by 2 percentage points, to 4.5 percent. BSP Governor Eli Remolona Jr. has said that the end of the easing cycle was near, adding that any future decisions would depend on data.

Average lending rates at big banks stood at 7.817 percent in September 2025, only about 3-percent lower than at the end of 2024, BSP figures show.

Experts have said the stickiness of borrowing costs, combined with weakening sentiment, risks blunting the effect of the central bank’s pro-growth efforts.

“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,” said Jonathan Ravelas, senior adviser at Reyes Tacandong & Co. “When trust is shaken, investors hesitate, and banks become more cautious.”

Lending to businesses increased 9 percent in November to P11.8 trillion, slightly slower than the 9.1-percent growth recorded a month earlier.

Credit to manufacturers fell 7.7 percent, extending a seven-month slide as global trade headwinds persisted. Notably, loans to the construction sector edged down 0.1 percent, marking a second consecutive month of decline, as the sector feels the pressure from the graft fallout.

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Household borrowing remained robust, rising 22.9 percent to P1.9 trillion, though easing from October’s 23.1 percent.

Broken down, credit card receivables posted a slightly faster increase of 29.5 percent, while motor vehicle loans growth eased to 16.3 percent. Salary-based general-purpose consumption loans expanded at a quicker pace of 6.4 percent.

“Loan growth should remain positive but moderate,” said John Paolo Rivera, senior research fellow at state-run Philippine Institute for Development Studies.

“Household credit may continue to expand, though at a gradually slower pace while a meaningful pickup in business lending will depend on clearer growth prospects, faster infrastructure execution and improved confidence,” Rivera added.