MANILA – Bank lending fell 2.7% in February in part due to the pandemic-induced slowdown in activity, the Bangko Sentral ng Pilipinas said on Wednesday.
Universal and commercial banks’ outstanding loans, net of reverse repo placement with BSP, contracted 2.7% year-on-year in February after falling 2.5% in January, BSP said. in a press release.
Outstanding loans to residents, net of RRPs, decreased by 2.1% while outstanding loans to non-residents contracted by 20.7%. Credit activity slowed further as demand for loans remained weak.
On a seasonally adjusted monthly basis, outstanding universal and commercial bank loans, net of RRPs, increased 0.2%, he said.
The BSP said consumer loans fell 8.3% in February due to “the continued decline in credit card and motor vehicle loans” and the slowdown in salary-based consumer loans.
Loans to major industries also declined, particularly to wholesale and retail trade and repair of motor vehicles and motorcycles, finance and insurance activities, and manufacturing.
Loans in some key production sectors such as real estate, power, gas, steam and air conditioning, transportation and storage “partially moderated” the contraction, the central bank said.
Loans outstanding for production activities fell 1.3% in February, BSP said.
“The BSP seeks to maintain its monetary policy in support of the measures taken by the government to deal with the pandemic. The BSP is ready to take immediate action, if necessary, to ensure sufficient liquidity and credit in the financial system, in line with its price and financial stability targets, “It said.
Bank loans in the Philippines fell for the first time in more than 14 years in December due to declining consumer demand and business activity during the COVID-19 pandemic.
The BSP said earlier that it expects bank lending to pick up with the implementation of a bill intended to allow banks to discharge bad debts. For more offers view greendayonline.com
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