Domestic demand drives lending as liquidity expands in February

Resident borrowing hits a 10.1% growth spurt, while the national money supply (M3) climbs to ₱19.8 trillion—outpacing January’s performance.

Credit activity in February remained largely supported by domestic demand, with households and local businesses continuing to borrow even as some segments began to show signs of slowing.

Loans to residents rose 10.1% year-on-year, slightly faster than the 9.9% recorded in January, reinforcing the role of local borrowers in sustaining overall credit growth. In contrast, lending to non-residents declined by 13.2%, pointing to weaker cross-border borrowing activity during the period.

The consumer cooldown

Consumer loans also continued to expand, growing 20.8%, although at a slightly slower pace compared to January’s 21.3%. The Bangko Sentral ng Pilipinas (BSP) attributed the easing to more modest increases in credit card and motor vehicle loans, suggesting that while household borrowing remains strong, some segments may be starting to cool.

At the same time, liquidity in the financial system continued to expand, reflecting sustained lending activity and a steady flow of funds across the economy.

Domestic liquidity, or M3, reached ₱19.8 trillion, up 10.3% year-on-year, faster than the 8.6% growth recorded in January. On a month-on-month basis, M3 increased by 1.2% after seasonal adjustments, indicating continued growth in the amount of money circulating in the system.

The BSP said this expansion was supported by higher claims on both the private sector and the national government, pointing to increased borrowing and spending activity. Taken together, the latest data suggests that liquidity conditions remain supportive of economic activity, even as certain areas of lending begin to show signs of moderation.

 

 

Money is moving. With ₱19.8 trillion circulating in the system, discover why resident borrowing is the secret engine keeping the Philippine economy resilient in 2026.

 

 

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