Fitch lauds banks for prudent property loan management

MANILA, Philippines – Fitch Ratings said Philippine banks have managed their property risks prudently amid rapid lending growth, with adequate risk controls and lending standards in place.

In a report, Fitch said the Residential Real Estate Property Index (RREPI) released by the Bangko Sentral ng Pilipinas (BSP) showed brisk but not excessive property price growth.

Fitch said results of the first RREPI suggest the robust real estate activity over the last few years has not led to significant overheating in the property market.

Fitch expects the country’s gross domestic product (GDP) to grow six percent this year after slowing down to 5.9 percent last year.

Earlier, BSP Deputy Governor Diwa Guinigundo said the country’s property sector remained vibrant in the first quarter of the year, but there are no signs of an asset bubble in the real estate sector.

Guinigundo said the RREPI increased 9.2 percent in the first quarter from 5.1 percent in the fourth quarter of last year.

The RREPI in the National Capital Region (NCR) went up to 9.7 percent from 6.3 percent, while that of areas outside NCR (AONCR) increased to 9.4 percent from 5.9 percent.