PROGRESS in the country’s vaccination drive and the gradual reopening of the economy are expected to help boost confidence and spur lending, a central bank official said.
Bangko Sentral ng Pilipinas (BSP) Department of Economic Research Senior Director Zeno R. Abenoja said bank lending rebounded after several months of decline following “the gradual easing of restrictions on the econ-omy, the increase in confidence as the government continue to provide programs and policies to support the economic recovery.”
“With the advancement in the vaccination program, we hope to see greater momentum in terms of bank lending not only to the production sector, but also the household or the consumer loan sector,” Mr. Abenoja said at a virtual BSP media forum on Thursday.
Outstanding loans disbursed by big banks rose by 2.7% year on year in September, marking the second straight month of loan growth.
Despite record low interest rates, lending contracted for eight straight months since December due to risk aversion among lenders and borrowers amid the crisis.
The government aims to vaccinate 70 million Filipinos against the coronavirus by the end of this year. Data from the Johns Hopkins University showed the Philippines has already fully vaccinated 39.4 million or 36.5% of its popu-lation.
Retail borrowings may recover once employment conditions get better, although this may take some time as economic rebound is not yet solid enough, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said.
“As the job market improves and the economy recovers, we can see retail loans move back into black with loans for autos and housing return while salary loans may fade as employees can secure their incomes on time,” Mr. Mapa said in an e-mail.
The unemployment rate increased to 8.9% in September, equivalent to 4.21 million Filipinos. This is the highest this year, matching the 8.9% jobless rate in February. — L.W.T. Noble