Consumer loans rise 13.6% in Q1 – BSP

Consumer loans extended by banks rose in the first quarter of 2014, both year-on-year and from the previous quarter, the Bangko Sentral ng Pilipinas (BSP) said.

In a news release on Tuesday, the BSP said consumer loans by universal, commercial, and thrift banks stood at P735.1 billion at the end of the quarter, 13.6 percent higher than the P647 billion in consumer loans in the first quarter of 2013.

It also showed a two-percent growth from P721.54 billion posted in the fourth quarter of 2013, reflecting a quarter-on-quarter growth trend since 2008.

The BSP said consumer loans went higher "amid the strong demand for vehicles during the period leading to the Holy Week and the summer season," with auto loans reaching P194.3 billion, up 16.3 percent year on year.

The increase seen in end-March figures came despite stricter credit standards implemented in the first quarter.

The net tightening covered "all types of household loans," including those for housing, credit card, and auto, it said.

"Net tightening for the household sector could be because consumer loans have been growing quite a bit over the past few quarters," said BSP Assistant Governor Ma. Cyd Tuaño-Amador. "As the level of lending to the household sector grows, the banks may have turned circumspect."

Banks' "tolerance for risks is relatively smaller because the year has just started," she added.

Non-performing consumer loans see slight dip

The end-March ratio of banks' non-performing consumer loans went down to 5.2 percent, a slight decrease from 5.3 percent of the same period in 2013.

From this, universal, commercial, and thrift banks set aside loan loss reserves of 70.5 percent "as a safety net against consumer credit risks," the BSP said.

Consumer loan exposure of Philippine banks in end-March 2014 also remained low compared to those of other Southeast Asian countries, whose figures stood as follows:

• Malaysia - 58.1 percent,
• Indonesia - 28.4 percent,
• Thailand - 27 percent, and
• Singapore - 25.7 percent.

The BSP said it looks into consumer financing as part of its efforts to monitor the "quality" of the total loan portfolio in the country.

Maintenance of high loan quality is "essential" to financial stability, it added. — Rose-An Jessica Dioquino/BM, GMA News