MANILA - Bank lending declined by 2.7 percent in February partly due slower activities brought by the pandemic, the Bangko Sentral ng Pilipinas said Wednesday.
Outstanding loans of universal and commercial banks, net of reverse repurchase placement with the BSP, contracted by 2.7 percent year-on-year in February following a decline of 2.5 percent in January, the BSP said in a statement.
Outstanding loans to residents, net of RRPs, declined by 2.1 percent while outstanding loans to non-residents contracted by 20.7 percent. Credit activity eased further as demand for loans remained soft.
On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans, net of RRPs, increased by 0.2 percent, it said.
The BSP said consumer loans went down by 8.3 percent in February due to "continued decline in credit card and motor vehicle loans" and the slowdown in salary-based consumption loans."
Loans to major industries also declined, particularly to wholesale and retail trade and repair of motor vehicles and motorcycles, financial and insurance activities, and manufacturing.
Loans in some key production sectors such as real estate, electricity, gas, steam and airconditioning supply, and transportation and storage "partially moderated" the contraction, the central bank said.
Outstanding loans for production activities fell by 1.3 percent in February, the BSP said.
"The BSP looks to keep its monetary policy stance supportive of the government’s measures to address the pandemic. The BSP is prepared to take immediate measures as appropriate to ensure ample liquidity and credit in the financial system, consistent with its price and financial stability objectives," it said.
Bank lending in the Philippines fell for the first time in more than 14 years in December due to weaker consumer demand and business activities during the COVID-19 pandemic.
The BSP earlier said it expects bank lending to pick up with the implementation of a bill meant to allow banks to offload bad debts.