Gross loans fell by 0.9 percent year-on-year as of end-December 2020, in sharp contrast to the 8.8 percent growth rate recorded in December 2019. Bank lending growth continues to wane as the pandemic dampens consumer spending and limits business activities. BSP’s survey indicates a net tightening of banks’ overall credit standards for both loans to enterprises and households.
Subsequently, demand for bank credit came down as the contagion transmitted to the real economy and eroded private consumption and investment demand. Impact on the real economy 7.