Banks' consumer loans breach P1 T

Lawrence Agcaoili (The Philippine Star) - May 5, 2016 - 10:00am

MANILA, Philippines - Consumer loans of big banks breached the P1 trillion level last year on the back of higher auto, housing and salary loans.

The Bangko Sentral ng Pilipinas (BSP) reported yesterday consumer loans of universal, commercial and thrift banks went up 17.5 percent to P1.06 trillion last year from P902.6 billion in 2014.

Data showed motor vehicle loans zoomed 32.1 percent to P330.89 billion last year from P230.12 billion in 2014, while residential real estate loans inched up 11.5 percent to P444.02 billion from P398.23 billion.

On the other hand, salary-based general-purpose consumption loans surged 68.1 percent to P104.32 billion last year from P62.05 billion in 2014.

Furthermore, credit card receivables of universal, commercial and thrift banks went up 9.1 percent to P179.25 billion from P164.31 billion.

“Consumer lending by banks continued to rise as the domestic economy sustained its growth amid the steady increase in overseas Filipino remittances, a growing Business Process Outsourcing industry, the solid performance of the services sector, and heightened consumer spending and investing,” the central bank said.

Growth in the country’s gross domestic product (GDP) accelerated to 6.3 percent in the fourth quarter of last year from 6.1 percent in the third quarter due to improved government spending and strong demand.

However, this was not enough as the GDP expansion slowed down to 5.8 percent last year from 6.1 percent in 2014 due to weak global demand and lack of government spending.

Faster economic growth improves the purchasing power of Filipinos allowing them to buy properties and motor vehicles.

Statistics showed non-performing commercial loans went up 9.82 percent to P47.67 billion last year from P43.31 billion in 2014, while loan loss reserves increased 6.32 percent to P27.97 billion from P26.31 billion.

Despite the increase, the ratio of non-performing commercial loans to total commercial loans decreased to 4.5 percent last year from 4.8 percent in 2014.

However, the BSP reported the Philippines remained the laggard among the Association of Southeast Asian Nations – 5 (ASEAN) in terms of percentage of consumer loans to total loan portfolio with 16.6 percent.

“As a percentage of total loan portfolio, the 16.6 percent consumer credit exposure of Philippine banks remained the lowest among the ASEAN 5 economies,” the BSP said.

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