July loan growth slows

Bank lending growth eased for the fourth consecutive month as fewer companies and individuals were able to maintain their appetite for borrowing due to the uncertainties brought about by the coronavirus pandemic.Data from the Bangko Sentral ng Pilipinas (BSP) showed that outstanding loans extended by universal and commercial banks, net of their short term deposits with the regulator, grew by 6.7 percent in July, slower than the 9.6-percent growth in June.

On a month-on-month seasonally-adjusted basis, commercial bank loans net of short term placements, declined by 0.9 percent.

“The slowdown in bank lending can be traced to weaker corporate sector performance and declining loan demand, as the ongoing health crisis continued to constrain domestic economic activity,” the BSP said.The latest data marked the fourth consecutive decline in the pace of lending since the 13.6-percent growth in March.

Loans for production activities, net of short term placements, grew by 5.9 percent in July, slower than the 8.2 percent in June. Growth in July was driven mainly by lending to real estate activities, information and communication, financial and insurance activities, electricity, gas, steam and air conditioning supply, human health and social work activities, and transportation and storage. Loans to households grew at a slower pace of 17.3 percent in July from 27 percent in June. INQ