[ad_1]
Nicholas Mapa, Senior Economist at ING Bank Manila
MANILA – The bank credit contraction, which registered its first in more than a decade, is expected to continue in the coming months due to the pandemic.
Citing Bangko Sentral ng Pilipinas (BSP) data released on Wednesday, ING Bank Manila senior economist Nicholas Mapa said in a report the 0.7 percent contraction in outstanding loans from universal and commercial banks (U / KB) in December 2020, which excludes placements. in BSP’s reverse repurchase mechanism (PVP), it is the first time since July 2008 or during the global financial crisis.
The contraction follows the 0.5 percent rise in bank loans last November.
Mapa said the drop in bank loans affected growth in domestic liquidity, or M3, after it slowed to 9.5 percent last December.
“With non-performing loans on the rise and the job market in shambles, we can expect bank loans to remain in contraction over the next several months as both consumer and business demand may be subdued given our economic outlook,” said.
And given that bank loans posted a negative impression in the final month of 2020, Mapa expects sustained weakness in domestic expansion.
Similar to the projections of economic administrators about the possible return of the expansion of the pre-pandemic level of the national economy, Mapa predicts that this will happen in “2022 or early 2023 with capital formation deteriorated due to the weakening of the confidence of consumers and businesses “. (PNA)
[ad_2]
