Consumer loans up 19% in June

MANILA, Philippines - Consumer loans extended by Philippine banks jumped 19.3 percent in the first six months on the back of the strong demand for auto and real estate loans, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Data released by the central bank showed consumer loans extended by universal, commercial, and thrift banks amounted to P959.2 billion in end-June, P155.13 billion higher compared to P802.05 billion last year.

The amount was also 2.83 percent or P26.4 billion higher compared to P932.78 billion booked in end March this year. The quarter-on-quarter growth in consumer loans started in 2008.

The BSP reported auto loans reached P259.36 billion in end-June, P52.32 billion more compared to P207.04 billion in end June last year as more consumer continued to acquire motor vehicles.

On the other hand, residential real estate loans surged 17.34 percent to P409.17 billion in end-June from P348.7 billion in end June last year amid the tightening of credit standards imposed by banks.

Residential real estate loans, however, was P2.27 billion lower compared to P411.44 billion booked in March this year.

In the latest Senior Loan Officers Survey of the BSP, banks imposed tighter credit standards for loans to commercial real estate for the 13th straight quarter.

The survey showed about 86.4 percent of the respondent banks indicated unchanged overall credit standards for commercial real estate loans using the modal approach.

However, based on the diffusion index approach, a net tightening of overall credit standards was noted for commercial real estate loans in the third quarter.

The BSP stepped up its monitoring of the real estate sector as early as 2012 by ordering banks to disclose more comprehensive reports on their exposures to property industry.

The BSP reported the banking industry’s credit card receivables went up 5.87 percent to P166.45 billion in end-June from P157.22 billion in end-June last year.

Likewise, salary loans surged 89.6 percent to P84.57 billion in end-June from P44.6 billion in end-June last year.

 The BSP said the quality of consumer loans improved amid the rise in consumer lending.

 The non-performing commercial loans of universal, commercial, and thrift banks represented 4.5 percent of total commercial loans, a decline from the 4.9 percent posted a quarter earlier.

Universal, commercial, and thrift banks also provisioned for 61.2 percent of their non-performing consumer loans as buffer for potential credit losses during said period.

As a percentage of total loan portfolio, the 16.7 percent consumer credit exposure of Philippine banks remained the lowest among the member economies of the Association of Southeast Asian Nations.