Outstanding loans extended by universal and commercial banks grew by 11.4 percent year-on-year in April, faster than the 10.7 percent expansion recorded in March, reflecting sustained demand for credit from businesses and households despite the energy crisis.

Preliminary Bangko Sentral ng Pilipinas (BSP) data showed bank lending increased by 1.1 percent month-on-month after adjusting for seasonal fluctuations, supported by banks' expectations of steady borrowing activity in the second quarter.

Loans to residents, which account for the bulk of banks' loan portfolios, rose by 11.8 percent in April from 11.1 percent a month earlier.

Business loans expanded by 10.7 percent, up from 9.7 percent in March, driven by stronger lending to key sectors including real estate, electricity and utilities, wholesale and retail trade, manufacturing, and financial and insurance activities.

Lending to the real estate sector grew by 8.1 percent, while loans to electricity, gas, steam and air-conditioning supply surged by 25.8 percent, indicating sustained demand for energy-related financial assistance amid the national energy emergency. 

Credit to wholesale and retail trade increased by 11.8 percent, while loans to manufacturing and financial and insurance activities rose by 1.0 percent and 6.7 percent, respectively.

Meanwhile, consumer loans to residents grew by 19.6 percent, although slightly slower than the 20.5-percent expansion recorded in March, reflecting moderation in credit card and motor vehicle lending.

The BSP also views bank lending as a key transmission channel for monetary policy. A rate hike—such as the one enacted at the end of April in response to the Middle East conflict—encourages banks to hold more deposits while reducing demand for consumer borrowing as interest rates become more expensive.