A record drop in consumer loans pulled down bank lending in January, Bangko Sentral ng Pilipinas data showed.
Outstanding loans by big banks sank 2.4% year-on-year in January, the second consecutive month of decline and the worst performance since August 2006.
The latest data adds to prevailing evidence monetary easing has hit a wall to fix the damage left by the health crisis. The BSP slashed policy rates by 200 basis points last year, but depressing lending figures showed it may not be creating much of an economic impact.
In January, household loans, long a reliable source of growth, shifted hard to the negative territory with a 6.9% drop year-on-year, the first decrease on available record from 2001. The contraction was massive considering in the previous month, consumer lending was growing 4.1%.
In simple terms, consumers are holding back from swiping their credit cards, or taking auto and home loans.