All-time-low delinquency rate to drive more lending in PHL —credit bureau

Consumer lending in the Philippines is expected to continue growing as the delinquency rate  registered at an all-time low, TransUnion Philippines Business Products & Solutions said Wednesday.

The delinquency rate in the Philippines came in at an all-time low in May 2018, TransUnion Philippines president and CEO Pia Arellano said.

Only 4 percent of all bank customers who take out loans pay 30 days past the deadline and an even lower 0.7 percent pay 90 days past the deadline, according to the private credit bureau.

“Delinquency is managed, but the portfolios are growing. So that’s definitely a good sign,” Arellano told reporters during a briefing in Makati City.

“When delinquency is managed, and it’s a lot, it should make banks more confident in extending more credit because their delinquency is very low,” she said.

TransUnion takes into account information from 38 banks in the country, involving 8 million customers covering 18.5 million accounts.

According to Bangko Sentral ng Pilipinas data, consumer lending reached P1.491 trillion in 2017 from P1.271 trillion in 2016.

TransUnion said it plans to roll out a separate credit rating system for small and medium enterprises (SMEs), which banks can use to evaluate loan applications.

“We’re already developing an SME score as well ... It will be ... low-risk, high-risk, medium-risk,” Arellano said.

TransUnion expects to roll out the SME credit rating in 2019. The metrics will cover the general health and well-being of various industries in which businesses operate. —VDS, GMA News