BSP data: Bank lending down 0.7% in July

Loans issued by big banks continued to decline in July, albeit at a slower rate than in previous months, data released by the Bangko Sentral ng Pilipinas (BSP) showed.

Preliminary data indicate that outstanding loans of universal and commercial banks net or reverse repurchase placements slipped 0.7% year-on-year after contracting 2.0% in July.

Outstanding loans to residents moderated by 0.1% versus the 1.4% decline in June, while outstanding loans to non-residents plunged by 17.4% after falling 19.7% in June.

“[A] new wave of COVID-19 infections owing to more virulent virus strains continue to dampen economic prospects and temper market sentiment,” the BSP said in an accompanying statement.

Consumer loans to residents declined 8.2%, as loans to motor vehicle loans continued to contract. This compares with the 8.7% drop the previous month.

Total outstanding loans for production activities grew 0.8%, marking its first expansion since November 2020 when it expanded by 0.5%.

The growth was driven by growth in loans for real estate; information and communication; electricity, gas steam, and air conditioning supply; and transportation and storage.

Outstanding loans to key sectors declined, as wholesale and retail trade and repaid or motor vehicles and motorcycles slipped 4.5% and manufacturing declined by 2.6%.

“Looking ahead, the BSP will continue to prioritize monetary policy support in order to ensure the continued momentum of economic recovery,” the BSP said.

“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,” it added. — RSJ, GMA News