Consumer lending up 17.5% as of end-2015

CEBU, Philippines - Consumer lending by banks continued to rise in 2015 as the domestic economy sustained its growth.

 The Bangko Sentral ng Pilipinas reported yesterday that universal, commercial and thrift banks reported P1.061 trillion in consumer loans (CLs) as of end 2015.

 "The figure rose by 17.5 percent from the P902.6 billion posted a year earlier and sustained the year-on-year growth in CLs that started in 2008," the central bank noted. The annual increase in CLs last December was driven by car and real estate loans.

BSP pointed to the steady increase in remittances from overseas Filipino workers, growing business process outsourcing (BPO) sector, the services sector's solid performance and robust consumer spending and investing as factors sustaining the economy.

 BSP also reported that non-performing consumer loans represented 4.5 percent of the total CLs last year, slightly down from the 4.8 percent posted in 2014.

 Non-performing loans are those that are in default or close to being in default.

 BSP pointed out Philippine banks' 16.6 percent consumer credit exposure remained the lowest among the other 5 Southeast Asian economies. As of end December 2015, consumer loan exposure in Malaysia stood at 56.8 percent; Thailand, 28.8 percent; Indonesia, 28 percent; and Singapore, 26.6 percent.

Consumer lending is expected to grow further, with millennials seen driving the growth, Cebu Bankers Club President Maximo Eleccion previously said. 

 The BSP monitors the level and quality of consumer and other bank loans to ensure banks’ adherence to high credit standards. — (FREEMAN)