MANILA - Bank lending dropped by 2.4 percent year-on-year in January reflecting a decreased demand from weaker consumer and business activities, the Bangko Central ng Pilipinas said Tuesday.
Outstanding loans of universal and commercial banks, net of reverse repurchase (RRP), declined by 2.4 percent year-on-year following a 0.7 drop in December, the BSP said in a statement.
Month-on-month, outstanding universal and commercial bank loans, net of RRPs, fell by 0.3 percent, the BSP said.
The central bank said outstanding loans to residents, net of RRPs, slightly dropped 1.7 percent, while outstanding loans to non-residents also decreased by 21.6 percent.
"In general, credit activity remained soft due to weak demand as banks continued to be risk-averse on concerns over asset quality and profitability," the BSP said.
Consumer loans declined by 6.9 percent in January due to lower credit card and motor vehicle loans as well as slower salary-based consumption loans, from an increase of 4.1 percent in December last year, BSP data showed.
Outstanding loans to key sectors also continued to decline including wholesale and retail trade and repair of motor vehicles and motorcycles, manufacturing, and financial and insurance activities, data showed.
The decline was partially tempered by sustained growth in loans to real estate activities, transportation and storage, electricity, gas, steam, and air conditioning supply, the BSP said.
Partial reopening of businesses resulted in "marginal" growth for loans to human health and social work activities as well as accommodation and food services activities, the central bank said.
Outstanding loans for production activities, net of RRPs, contracted by 1.1 percent in January, the BSP said.
Bank lending in the Philippines fell for the first time in over 14 years in December due to weaker consumer and business activities brought by COVID-19 restrictions placed nationwide.
-- with a report from Reuters