Bank lending for real estate up 16% to P1.8 trillion last year

MANILA, Philippines — The exposure of Philippine banks to the volatile real estate sector remained above 20 percent of their total loan portfolio in 2017 as loans went up by 16 percent, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
The BSP said real estate loans reached P1.8 trillion last year, P251.98 billion higher than the P1.55 trillion recorded in 2016.
The total loan portfolio of Philippine banks jumped 19 percent to P7.18 trillion last year from P6.03 trillion in 2016 as banks disbursed more loans to the productive sector as well as households.
Residential loans went up 14.7 percent to P608.14 billion last year from P529.9 billion in 2016, while commercial real estate loans rose 17 percent P1.12 trillion from P1.02 trillion.
Likewise, data showed real estate investments in debt securities and equities rose 5.3 percent to P276.97 billion from P263.11 billion.
The BSP monitors the real estate exposures of universal, commercial, and thrift banks as part of its broader role of assessing the quality of bank exposures to the different sectors of the economy.
Last September, the Monetary Board placed the real estate and project finance exposures of Philippine banks under tight watch as debt watchers and multilateral lending agencies have raised the possibility of overheating in the economy.
The regulator approved enhancements to the prudential reporting requirements in order to strengthen oversight of banks’ real estate and project finance exposures.
The reportorial enhancements form part of BSP’s macroprudential toolkit and are being deployed to sharpen the central bank’s assessment of banking system exposures to the property sector.
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