The Philippines: Bank lending contracts for the 6th consecutive month

• Loans released by big banks contracted for the sixth straight month, since Jan 21, although at a slower pace of 4% in May 21 from 5% in Apr 21, as demand remained subdued due to the resurgence of COVID-19 cases, according to the Bangko Sentral ng Pilipinas (BSP).
• Preliminary data released by the BSP showed outstanding loans of universal and commercial banks reached PHP9.01tr in end-May 21, from PHP9.39tr in May 20.
• Lending for production activities shrank by 2.9%, hitting PHP7.94tr in May 21, compared to May 20 levels of PHP8.13tr for an 88.1% share of total loans.
• Disbursements to the real estate sector went up by 3.9% to reach PHP1.78tr and accounted for 19.8% of the total loan disbursements.
• Loans disbursed to electricity, gas, steam and air-conditioning supply slipped by 0.2% to PHP1.03 trillion and cornered a share of 11.4%, while loan releases to manufacturing fell by 7.9% to PHP986.37bn for a share of 10.9%.
• The mining and quarrying sector also booked a 20% contraction to PHP39.69bn, while lending to the agriculture, forestry, and fishing sector fell 7.4% to PHP192.48bn.
• Furthermore, consumer loans fell by 9.2% to PHP820.86bn in May 21 from PHP903.99bn in May 20, for a share of 9.1% of total loan releases.
• Credit card loans declined by 5.7% to PHP394.8bn amid the rising default by borrowers affected by the pandemic.

External Link : https://www.philstar.com/business/2021/07/01/2109248/bank-lending-tightens-6th-straight-month