BANK LENDING IN MARCH DIPS EVEN MORE BY 4.5%
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n Tuesday, May 11, 2021 Vol. 16 No. 209
P25.00 nationwide | 2 sections 18 pages |
THE LRT Line 1 Cavite extension being constructed in Parañaque, seen here reflected in the river, is now halfway finished. Partial operations are expected by the end of 2021. This 11.7-km extension of the existing LRT Line 1 will run from Baclaran to Niog in Bacoor, Cavite, and is seen to cut travel time from Manila to Cavite from the current 1 hour and 10 minutes to only 25 minutes, as well as accommodate 300,000 to 500,000 passengers daily. NONIE REYES
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By Bianca Cuaresma
@BcuaresmaBM
ANK lending in the country is still showing no signs of recovery as of March this year, as the Bangko Sentral ng Pilipinas (BSP) reported that it continued to contract at a larger rate during the month.
BSP data showed that bank lending in March hit a contraction of 4.5 percent, falling faster than the 2.7- percent contraction seen in the previous month. Bank lending first fell under contraction territory in December 2020 by 0.7 percent. March is the fourth consecutive month of bank lending in the contraction territory and the twelfth consecutive month that bank lending has slowed de-
spite BSP’s aggressive efforts to lower interest rates and boost liquidity conditions. In comparison, the Philippines’s bank lending growth rate was at 13.6 percent in March 2020. The BSP said the already weak appetite of banks to lend was further strained by the reimposition of restrictions to curb the rising Covid-19 cases in key areas in the country. “Credit activity remained tepid
Q1 farm output down 3.3% on livestock, poultry woes By Jasper Emmanuel Y. Arcalas
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@jearcalas
HE dismal performance of the livestock and poultry subsectors slashed the country’s farm output in the first quarter by 3.3 percent despite an abundant crop harvest, the Philippine Statistics Authority (PSA) said on Monday. The reduction in total output, driven by a 23.2-percent contraction in livestock production, is “ bad news” as the countr y started the celebration of Farmers and Fisherfolk Month on May 10. The Department of Agriculture (DA) noted that the “good perfor-
mance” of the crops and fisheries subsectors was not enough to “pull up” agriculture growth in the first quarter. This is now the second consecutive quarter that agricultural output declined and is the steepest Januar y-to-March per iod decline since the first quarter of 2016, based on historical PSA data. In its quarterly report, the PSA said crops production, which accounts for more than half of total agricultural output, grew by 3.3 percent on the back of an 8.6-percent and 6.5-percent increase in the production of palay and corn, respectively.
on banks’ tighter lending standards as a resurgence in coronavirus cases dampened the domestic economic outlook,” the BSP said. Broken down, outstanding loans to major industries decreased, particularly to wholesale and retail trade and repair of motor vehicles and motorcycles (by 9.7 percent) and manufacturing, by 5.5 percent. Lending to financial and insurance activities also declined by 5.1 percent during the month. The decline could have been larger, the BSP said, if not partially offset by the expansion in loans to some key production sectors such as electricity, gas, steam, and air-conditioning supply which grew by 2.9 percent, real-estate activities which grew by 1.5 percent, and human health and social work activities which grew by 11.6 percent. Consumer loans to residents also dropped by 9.9 percent in March
after an 8.3-percent contraction in February due to the decline in credit card and motor vehicle loans. The decline in bank lending also happened in an environment of expanding domestic liquidity in the country. In a separate report on Monday, the BSP said domestic liquidity— broadly measured as M3—grew by 8.3 percent year-on-year to about P14.2 trillion in March 2021. This was slower than the 9.4-percent expansion in February. The BSP vowed to keep an eye on evolving lending and liquidity conditions to “ensure that the overall stance of monetary policy remains in line with the BSP’s price and financial stability objectives, while providing support to the national government’s efforts to combat the impact of the health crisis on the economy.” The BSP is set to meet for its monetary policy setting this week.
2-MONTH FDI LARGER BY 20.6% DESPITE SLIDE IN FEBRUARY
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ONG-TERM investments made by foreign players to the local economy slightly dipped in the second month of the year, the Bangko Sentral ng Pilipinas (BSP) reported on Monday. Foreign Direct Investments (FDI) to the Philippines hit $608 million in February this year, bringing the total 2021 FDI to the country to $1.57 billion. FDI are investments made by foreign players to the Philippines with an eye to longterm return. Since these are in the country for a longer term compared to the short-term foreign portfolio investments ( FPI ), F DI u s u a l ly c re ate jobs for Filipinos and have a mu ltiplier effect on the economy. The February FDI inflow is 2.2 percent lower than the $621-million FDI inflow seen in February 2020. The twomonth cumulative FDI of the country, however, remained in growth territory due to the big FDI numbers in January. In particular, the FDI inflow for January and February of $1.57 billion is still 20.6 percent larger than the $1.3-billion twomonth FDI in 2020. The BSP attributed February FDI’s “slight decline” to the 88.3-percent drop in nonresidents’ net investments in
equity capital to $20 million in February 2021 from $175 million in February 2020. This, as equity capital placements decreased by 62.1 percent to $89 million in February 2021 from $236 million in 2020, and withdrawals rose by 13.6 percent to $69 million from $61 million in February last year. The decline could have been larger, the BSP said, had it not been tempered by the 36.1-percent increase in the foreign investors’ net investments in debt instruments to $515 million in February 2021, from $378 million last year. Reinvestment of earnings also rose by 6.1 percent to $72 million from $68 million in February 2020. For the January-to-February period, the BSP said equity capital placements came from Singapore, Japan, the Netherlands, and the United States. These investments were channeled largely to financial and insurance; manufacturing; and real-estate industries. Earlier this year, the BSP raised its projection for the FDI in the country from $7.5 billion to $7.8 billion by yearend on renewed optimism for the local and global economy after being ravaged by restrictions to curb the pandemic. Bianca Cuaresma
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PESO EXCHANGE RATES n US 47.9000
n JAPAN 0.4410 n UK 67.0792 n HK 6.1679 n CHINA 7.4485 n SINGAPORE 36.1646 n AUSTRALIA 37.5871 n EU 58.2895 n SAUDI ARABIA 12.7733
Source: BSP (May 10, 2021)