MANILA, Philippines — The percentage of households with outstanding loans continues to increase as families turn to borrowing to cope with higher expenses due to rising prices of basic commodities, a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.
Redentor Paolo Alegre, head of the central bank’s Department of Economic Statistics (DES), said the result of the Consumer Expectations Survey for the fourth quarter 2018 showed almost one-third or 32.5 percent of the respondents declared that he or she and his or her spouse have an outstanding loan at present.
This was higher than the 31.7 percent recorded in the third quarter of the year. The survey was conducted from Oct. 1 to 13 covering 5,609 households nationwide.
Outstanding debt or loan pertains to the unpaid balance of loans by respondent including spouse or partner reported active at the time of survey interview.
Alegre said the debt-to-income ratio of surveyed respondents fell to 24.3 percent for the current quarter from the previous quarter’s 43.4 percent.
Notwithstanding, he pointed out the total principal debt jumped 57.6 percent to P189.35 million in the fourth quarter from P120.16 million in the third quarter.
Likewise, the average amount of principal loan of respondents or spouse at P89,486 was more than the previous quarter’s P59,901.
On the other hand, average monthly loan amortization for the current quarter decreased to P10,070 from P15,301, while the median monthly amortization was higher at P2,300 from P2,000.
He said majority or 78.3 percent of the loans were paid on schedule, while 5.5 percent were ahead and 16.2 percent were behind.
On average, Alegre said respondents or spouses paid an annual interest rate of 30.9 percent, lower than the 36.6 percent in the third quarter.
Alegre said cash loans continue to be the most preferred type of loan with availments for the fourth quarter at 72.4 percent of those with outstanding loans, higher than the previous quarter survey’s result at 67.6 percent.
This was followed by loan in kind, particularly food items at 13.4 percent and salary loans at 8.1 percent.
Similar to the previous quarter, Alegre said most of the loans availed at 89.6 percent had no collateral.
He pointed out respondents’ relied more on the “Sangla ATM”, the most common collateral used at 3.1 percent followed by harvest at 1.7 percent, real property at 1.1 percent, and land at one percent.