Preliminary data show that outstanding loans of universal and commercial banks (U/KBs), net of reverse repurchase (RRP) placements with the BSP, declined by 0.7 percent year-on-year in July after falling by 2.0 percent in June. On a month-on-month seasonally-adjusted basis, outstanding universal and commercial bank loans, net of RRPs, rose by 0.5 percent.
Outstanding loans to residents, net of RRPs, declined marginally 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.
Consumer loans to residents went down by 8.2 percent in July from an 8.7-percent (revised) decline in June due mainly to 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 have increased since the reported growth rate of 0.5 percent (revised) in November 2020. The expansion was driven by growth in loans for real estate activities (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). At the same time, 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).
Looking ahead, the BSP will continue to prioritize monetary policy support in order to ensure the continued momentum of economic recovery. At the same time, the National Government’s targeted fiscal initiatives and health interventions will be crucial in boosting domestic demand and strengthening the recovery. (BSP) – rir
