The banking sector’s lending engine sputtered in January 2026, with loans from universal and commercial banks (U/KBs) expanding by a weaker 9.3 percent year-on-year, down from December’s revised 9.6 percent.
This slowdown underscores mounting cracks in credit momentum despite the central bank’s watchful eye.
Seasonally adjusted figures reveal only a meager 1.0 percent month-on-month increase, highlighting the sector’s struggle to sustain robust lending activity.
Loans to residents barely held ground, easing to 9.9 percent growth from December’s 10.1 percent.
Meanwhile, loans to non-residents plunged deeper into contraction, collapsing by 10.4 percent compared to an already steep 8.0 percent decline.
The message is clear: foreign demand for Philippine credit is evaporating.
Business lending expanded by 8.2 percent, but the gains were uneven.
Real estate loans rose 9.1 percent, while electricity and energy-related lending surged 20.3 percent. Transportation and storage loans also jumped 19.1 percent.
Yet other sectors lagged, financial and insurance activities crawled at 5.5 percent, and information and communication barely moved at 4.9 percent.
Wholesale and retail trade posted a modest 8.3 percent rise, hardly enough to offset the broader slowdown.
Consumer loans remain the lone powerhouse, surging 21.3 percent, though even this was slightly weaker than December’s 21.5 percent. Credit card, auto, and salary loans continue to fuel household borrowing, but the pace is showing signs of fatigue.
The Bangko Sentral ng Pilipinas (BSP) insists it will keep liquidity and lending conditions aligned with its stability mandates. But the numbers tell a harsher story: bank lending is losing steam, foreign borrowers are retreating, and the economy’s credit lifeline is fraying at the edges.
Unless decisive action is taken, January’s slowdown could be the start of a more troubling trend.
