Bank lending continues slump in July but at a slower rate

Data from the Bangko Sentral ng Pilipinas showed that outstanding loans of universal and commercial banks dipped by 0.7 percent in July, slower than the two percent decline a month earlier.

Loans to major production sectors rose 0.8 percent to P8.045 trillion, ending eight months of contraction.

Loans extended to real estate activities grew 5.9 percent to P1.823 trillion.

On the other hand, consumer loans dropped by 8.2 percent to P814.7 billion, weighed down by the 15.4 percent decline in motor vehicle loans.

Credit card loans were down 1.6 percent to P402.35 billion.

BSP Governor Benjamin E. Diokno said while bank lending showed some improvement, credit activity remained weak due to risk aversion and weak economic sentiment.

“Bank credit continues to decline as the necessary measures to address the still elevated number of COVID-19 cases constrained domestic economic activity and dampened market sentiment,” Diokno said.

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