BSP notes sustained loan growth in some industries

CEBU, Philippines — The Bangko Sentral ng Pilipinas (BSP) recorded an improvement in loans in some sectors following the reopening of business activities.

Sustained growth in loans also noted in some major production sectors, specifically to real estate activities (5.7 percent), transportation and storage (6.6 percent), construction (4.3 percent), and electricity, gas, steam, and air conditioning supply (3.5 percent).

Likewise, businesses engaged in human health, social work activities, accommodation and food services are now availing loans from banks, BSP report revealed.

Meanwhile, outstanding loans to key sectors continued to decline, particularly to wholesale and retail trade and repair of motor vehicles and motorcycles (-6.9 percent), manufacturing (-7.4 percent), as well as financial and insurance activities (-6.3 percent).

Preliminary data shows that outstanding loans of universal and commercial banks (U/KBs), net of reverse repurchase (RRP) placements with the BSP, decreased by 2.4 percent year-on-year in January following a 0.7-percent decline in the previous month.

On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans, net of RRPs, fell by 0.3 percent.

Outstanding loans to residents, net of RRPs, recorded a slight decline of 1.7 percent, while outstanding loans to non-residents likewise 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.

Under loans to residents, consumer loans contracted by 6.9 percent in January 2021 after increasing by 4.1 percent in December 2020 due to the decline in credit card and motor vehicle loans as well as the slowdown in salary-based consumption loans during the month.

Overall, outstanding loans for production activities, net of reverse repurchase RRPs, went down by 1.1 percent in January from a 0.4-percent decline in the previous month.

The BSP’s accommodative monetary policy stance continues to complement critical fiscal and health interventions in supporting economic activity and market sentiment.

Looking ahead, the BSP reiterates its commitment to take appropriate measures as needed to ensure ample liquidity and credit, consistent with its mandate to maintain price and financial stability.