MANILA: Philippine bank lending fell for the first time in more than 14 years in December, reflecting weak consumer and business activity, with the trend expected to persist as coronavirus restrictions remain in place in many parts of the country.

Outstanding loans of universal and commercial banks, net of reverse repurchase placements, dropped by 0.7% in December from a year ago, despite a series of interest rate cuts by the central bank to boost lending.

The decline was the first since September, 2006, preliminary data from the central bank showed, and some economists expect lending to remain weak given subdued consumer and corporate demand.

Production loans, comprising 87.4% of the combined loan portfolio of universal and commercial banks, fell 0.4% in December from a year earlier, while consumer loans rose at a much slower pace of 4.4% compared with November’s 7.1%.