Bank loans showed signs of recovery in July with a month-on-month growth of 0.5 percent from June, on stronger demand for production loans, data from the Bangko Sentral ng Pilipinas show.
The BSP data showed that while outstanding loans of universal and commercial banks, net of reverse repurchase placements with the BSP, declined 0.7 percent in July from a year ago, this was an improvement from the 2.0-drop in June. On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans, net of RRPs, rose 0.5 percent, the BSP said.
Outstanding loans to residents, net of RRPs, declined by 0.1 percent following a 1.4-percent decrease in June.
“Meanwhile, outstanding loans to non-residents declined by 17.4 percent [after falling by 19.7 percent in June], as a new wave of COVID-19 infections owing to more virulent virus strains continue to dampen economic prospects and temper market sentiment,” the BSP said.
Consumer loans to residents went down by 8.2 percent in July from an 8.7-percent decline in June on the continued contraction in motor vehicle loans.
Meanwhile, total outstanding loans for production activities expanded by 0.8 percent in July, following a contraction of 0.6 percent in the previous month.
“This is the first time that outstanding production loans has increased since the reported growth rate of 0.5 percent [revised] in November 2020,” the BSP said.
The expansion was driven by growth in loans for real estate activities (up 5.9 percent); information and communication (14.0 percent); electricity, gas steam and airconditioning supply (2.1 percent); and transportation and storage (7.0 percent).
Outstanding loans to key sectors fell at a slower rate, particularly for wholesale and retail trade and repair of motor vehicles and motorcycles (-4.5 percent) and manufacturing (-2.6 percent).
Meanwhile, domestic liquidity or M3 expanded by 5.9 percent year-on-year to about P14.4 trillion in July. This was slower than the 6.5-percent growth recorded in June. On a month-on-month seasonally-adjusted basis, M3 rose 0.1 percent.