Bank lending falls anew in January

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Metro Manila (CNN Philippines, March 3) — Bank loans contracted 2.4% in January from the same period a year ago, the Bangko Sentral ng Pilipinas said.

In a statement Tuesday, the BSP said outstanding loans of universal and commercial banks stood at ₱8.95 billion at the end of the first month of the year, 2.4% down from end-January 2020, when bank lending hit ₱9.17 billion.

The recent figure comes after a 0.7% fall recorded in December after over 14 years of growth

“In general, credit activity remained soft due to weak demand as banks continued to be risk-averse on concerns over asset quality and profitability,” it said.

Loans to non-residents dropped 21.6% in January, totaling ₱258.55 million during the period.

Meanwhile, outstanding consumer loans were hit hardest in lendings to residents, posting a 6.9% contraction during the month to ₱861.42 million. This succeeds an annual growth of 4.1% in December.

The central bank attributes this to a drop in credit card and motor vehicle loans, along with slower salary-based consumption lending in January.

Loans to key sectors also continued to go down. In particular, loans for the trade and repair of motor vehicles and motorcycles dropped to ₱1.06 billion, 6.9% less from end-January 2020. Loans to manufacturing went down 7.4% to ₱966.73 million, while lending for financial and insurance activities fell 6.3% to ₱814.33 million.

Meanwhile, industries such as human health and social work activities saw loans go up 11% to ₱87.8 million with the reopening of business activities. Other sectors which posted growths include construction, transportation and storage, and real estate, noted the BSP.

Outstanding loans to residents, in sum, went down 1.7% to ₱8.69 billion, data from the BSP read.

“The BSP’s accommodative monetary policy stance continues to complement critical fiscal and health interventions in supporting economic activity and market sentiment,” it said, reiterating its commitment to taking measures needed to ensure ample liquidity and credit.