Consumer loans up 21 % in Q3 2014 – Bangko Sentral

Consumer loans rose in the third quarter of 2014 on the back of borrowings for real estate and automotive investments, the Bangko Sentral ng Pilipinas (BSP) said Tuesday.

 

In an e-mailed statement, the central bank universal, commercial, and thrift banks extended up to P849.6 billion in consumer loans as of end-September, up 20.94 percent higher from P702.6 billion a year earlier.

 

Quarter-on-quarter, consumer loans went up 5.7 percent from P804 billion, reflecting continued quarterly growth since 2008.

 

"The rise in consumer lending is mainly due to a quarter-on-quarter increase in residential real estate and auto loans," the BSP said.

 

Residential real estate lending is a major driver of overall loans, Bank of the Philippine Islands economist Nicholas Mapa told GMA News Online.

 

It accounts for 45 percent of the total consumer loans.

 

The ratio of banks' non-performing consumer loans were kept manageable at 4.9 percent as of end-September, a slight decrease from the 5 percent a quarter earlier. 

 

Universal, commercial, and thrift banks set aside up to 64 percent in loan loss reserves to cover non-performing consumer loans as a safety net against credit risks. 

 

Compared with Southeast Asian peers, consumer credit exposure of Philippine banks remained low at 16.7 percent as of end-September 2014.

 

Malaysia registered a consumer credit exposure of 54.1 percent, while Indonesia recorded 28.2 percent, Thailand logged 27.7 percent and Singapore reported 25.7 percent.

 

The BSP reiterated it monitors the quality of consumer and other types of bank lending, which is "essential to fostering financial stability, which is a key policy objective."

 

In October 2014, the central bank said it was monitoring consumer loans carefully because of a strong growth rate. – VS, GMA News