Manila: Loans extended by universal and commercial banks (U/KBs) expanded at a slower pace of 9.2 percent in December 2025 from the previous month's 10.3 percent, the Bangko Sentral ng Pilipinas (BSP) reported. According to Philippines News Agency, growth of loans extended to residents rose by 9.7 percent in the last month of 2025, a deceleration from the 10.7 percent in November, while those for non-residents dropped 8.1 percent from a slowdown of 4.5 percent over the same period, the central bank said in a report Monday night. Consumer loans posted a faster expansion of 21.4 percent compared to 8 percent for business activities, BSP data show. Consumer loans include those extended through credit cards, motor vehicle, and general-purpose loans, which also registered a slower jump last December, compared to the 22.9 percent in the previous month. Those for business activities, meanwhile, were extended for electricity, gas, steam, and air-conditioning supply, which rose 26.8 percent; wholesale and retail tra de, repair of motor vehicles and motorcycles, 10.8 percent; real estate activities, 8.3 percent; and financial and insurance activities, 3.9 percent. The BSP said it monitors bank loans 'because they are a key transmission channel of monetary policy.' 'Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain consistent with its price and financial stability mandates,' it added. Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort, in a reply to questions from the Philippine News Agency on Tuesday, traced the slowdown to 'the same trend of the domestic economy in the second half of last year.' He said the drop in government spending on infrastructure had affected sales and earnings in related activities, and weighed on investor confidence and sentiment. He noted that the growth of bank loans remains faster than the 3 percent output of the domestic economy in the last quarter of last year, which, he said, 'could have been supported by relatively lower bo rrowing costs/financing costs' after the reduction in the BSP's key rates. 'Going forward, catch up spending by national government, especially on infrastructure in 2026, to make up for the underspending in the latter part of 2025 hinged on priority anti-corruption measures and other priority reforms to further improve/level up good governance standards would help boost economic growth and also improve investor confidence/sentiment, foreign and local, thereby would lead to faster demand for loans/credit,' he said. During the same period, growth of domestic liquidity, or the money sloshing into the economy, registered a slower expansion of 7 percent in December, against the 7.6 percent in the previous month, according to the BSP. Citing preliminary data, the central bank said money supply, or M3, last December reached PHP20.1 trillion. Despite the slower growth of domestic liquidity, which includes currency in circulation, bank deposits, and other financial assets that are easily convertible to cash, the BSP said 'M3 remained broadly stable from November.'