MANILA - Bank lending fell in March as a surge in COVID-19 cases dampened economic outlook, the Bangko Sentral ng Pilipinas said on Monday.
The BSP said preliminary data showed that outstanding loans of universal and commercial banks, net of reverse repurchase (RRP) placements with the BSP, decreased by 4.5 percent year-on-year in March following a 2.7-percent fall in February.
Consumer loans dropped by 9.9 percent in March after an 8.3-percent contraction in February due to the decline in credit card and motor vehicle loans.
"Credit activity remained tepid on banks’ tighter lending standards as a resurgence in coronavirus cases dampened the domestic economic outlook," the BSP said.
The central bank has kept interest rates at historic lows and reduced banks reserve requirements by 200 basis points last year, in an effort to get banks to lend more and prop up the economy.
Despite this, banks have tightened credit standards, amid worries over loan defaults as businesses and consumers struggled with the economic impact of the pandemic.
The BSP is expected to keep interest rates steady again when it meets on Thursday.