Bank lending declines in December


    Outstanding loans of universal and commercial banks declined by 0.7 percent in December after increasing by 0.5 percent in November, data from the Bangko Sentral ng PIlipinas showed.

    On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans was broadly steady at about 0.1 percent.

    The report also showed that loans to residents registered a marginal increase. However, this was more than offset by the 20.3-percent drop in outstanding loans to non-residents.
    “Lending remained tepid as banks continued to be risk-averse amid the ongoing pandemic,” BSP said.

    Under loans to residents, consumer loans grew at slower rate of 4.4 percent in December from 7.1 percent in November due to the slowdown in credit card loans, motor vehicle loans, and salary-based consumption loans during the month.

    Loans to some major production sectors expanded, particularly to real estate activities, electricity, gas, steam, and air conditioning supply, human health and social work activities, information and communication, and transportation and storage.

    Outstanding loans to key sectors continued to decrease, especially to wholesale and retail trade and repair of motor vehicles and motorcycles, manufacturing, as well as financial and insurance activities.

    On balance, outstanding loans for production activities, net of RRPs, went down by 0.4 percent in December following the 0.7-percent growth in November.

    Meanwhile, domestic liquidity (M3) expanded by 9.5 percent year-on-year to about ₱14.2 trillion in December.

    This was slower than the 10.5-percent growth in November. On a month-on-month seasonally-adjusted basis, M3 increased by 0.7 percent.

    Domestic claims grew by 4.7 percent year-on-year in December from 6.7 percent in the previous month amid tepid bank lending activity.

    Loans for production activities contracted as lending to key industries eased, specifically for wholesale and retail trade and repair of motor vehicles and motorcycles; manufacturing; and financial and insurance activities.