Metro Manila (CNN Philippines, September 1) — Bank lending in the country slid at a milder pace in July, recent data from the Bangko Sentral ng Pilipinas revealed.
Outstanding loans of universal and commercial banks stood at ₱9.118 billion during the month, falling by 0.7% from the ₱9.179 billion tallied in July 2020.
The latest pace is milder than the 2% contraction logged in June and marks the eight straight month of bank lending decline beginning December 2020.
Outstanding loans to residents tumbled by 0.1% in July to ₱8.86 billion during the month, while lending to foreigners crashed by 17.4% to ₱258.505 million. Both rates were softer than the ones logged in June, according to BSP data.
The declines come as “a new wave of COVID-19 infections owing to more virulent virus strains continue to dampen economic prospects and temper market sentiment,” said the central bank.
Consumer loans likewise dropped by 8.2% during the month, yielding a tally of ₱814.695 million primarily because of the “continued” dive in motor vehicle loans.
Loans in terms of production activities expanded by 0.8% in July to ₱8.045 billion after shrinking by 0.6% in June — growing for the first time since November last year.
According to BSP, among the sectors that contributed to production activity loan growth were information and communication along with transportation and storage — registering growth rates of 14% and 7% respectively in July.
Real estate activities, along with electricity, gas steam and airconditioning supply loans also increased during the month.
Meanwhile, loans to administrative and support services activities, along with mining and quarrying plunged by 33% and 19.5% respectively.
Other sectors which logged negative growth rates include education, agriculture, and wholesale trade and repair of motor vehicles.
“Looking ahead, the BSP will continue to prioritize monetary policy support in order to ensure the continued momentum of economic recovery. At the same time, the National Government’s targeted fiscal initiatives and health interventions will be crucial in boosting domestic demand and strengthening the recovery,” said the central bank.
