- September 1, 2021
- Posted by: admin
- Category: Daily News
- Bank lending continued to contract in Jul 21, albeit at a milder pace, but the recent return to harsh lockdowns may reverse some gains.
- Excluding lending to each other, outstanding loans of big banks fell 0.7% y/y in Jul 21 to PHP9.12tr, the Bangko Sentral ng Pilipinas reported on 1 Sep 21.
- This drop was slower compared with -2% y/y decline posted in Jun 21. Sequentially, bank lending inched up by measly +0.5% m/m.
- This marked the seventh straight month of decline in lending, a depressing trend that the central bank blamed on borrower’s fears of incurring more debts at a time the pandemic is roiling job markets, and lender’s decision to tighten access to credit as soured loans they hold build up.
- Data showed consumer loans sagged at an annualized rate of -8.2% in Jul 21 due to continued contraction in motor vehicle loans. This, however, was slower than the revised -8.7% drop in Jun 21.
- Meanwhile, loans that banks extend to businesses for various activities surprised with a 0.8% y/y expansion to PHP8.04tr in Jul 21, the first growth since Nov 20 and a reversal from -0.6% slump recorded in Jun 21.