The pandemic-induced contraction in Philippine bank lending is now officially a trend after the central bank released data showing a decline for the third consecutive month of loans underwritten by financial institutions in February.
According to the Bangko Sentral ng Pilipinas, outstanding loans of universal and commercial banks, net of short-term deposits with the regulator, fell by 2.7 percent year-on-year in February after declining by 2.5 percent in January. On a month-on-month seasonally adjusted basis, outstanding universal and commercial bank loans increased by 0.2 percent.
Outstanding loans to residents declined by 2.1 percent while outstanding loans to nonresidents contracted by 20.7 percent.
Credit activity eased further as demand for loans remained soft, the central bank said in a statement.
Meanwhile, preliminary data from the central bank showed that domestic liquidity rose by 9.4 percent year-on-year to P14 trillion in February 2021.