11/14/2020 Bangko Sentral ng Pilipinas Media and Research

Media and Research - Press Releases

 

Bank Lending Growth Weakens in September

November 10, 2020
 
Preliminary data show that growth in outstanding loans of universal and commercial banks, net of
reverse repurchase (RRP) placements with the BSP, eased to 2.8 percent in September from 4.7
percent in August. On a month-on-month seasonally-adjusted basis, outstanding universal and
commercial bank loans, net of RRPs, decreased by 1.0 percent. The general decline in bank growth
partly reflects banks’ reduced tolerance for risk, decline in loan demand due, in turn, to weak business
and income prospects  and observed shift by non-financial corporates to alternative sources of funds.

Loans for production activities, net of RRPs, grew by 2.4 percent in September from 4.1 percent
(revised) in August as loans across most sectors decelerated during the month. Outstanding loans to
key sectors also continued to contract, particularly in manufacturing (-2.6 percent) as well as wholesale
and retail trade and repair of motor vehicles and motorcycles (-3.4 percent). Meanwhile, the following
sectors contributed to the overall growth in production loans: real estate activities (7.3 percent);
information and communication (9.7 percent); electricity, gas, steam, and air conditioning supply (3.0
percent); human health and social work activities (44.5 percent); and transportation and storage (8.4
percent).

Similarly, loans to households expanded at a lower rate of 10.2 percent in September from 12.9
percent in August mainly due to the continued slowdown in credit card and motor vehicle loans during
the month.

The BSP emphasizes that its accommodative monetary policy stance, together with the National
Government’s ongoing health and fiscal initiatives, remains crucial in supporting market sentiment and
credit activity. Looking ahead, the BSP reassures the public of its commitment to deploy its full range
of instruments as necessary to ensure that domestic liquidity and credit remain adequate amid
significant economic disruptions due to the ongoing health crisis.

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