REAL estate loans from the country’s commercial banks reached P1.154 trillion in September, data from the Bangko Sentral ng Pilipinas (BSP) revealed. Preliminary data from the central bank show that for production loans, which account for 88.8 percent of banks’ aggregate loan portfolio net of reverse repurchase (RRP) placements, loans to real estate activities grew by 16.8 percent year-on-year. Other sectors that banks have increased lending are electricity, gas, steam and airconditioning supply (24.1 percent); wholesale and retail trade, repair of motor vehicles and motorcycles (16.7 percent); financial and insurance activities (20.4 percent); other community, social and personal activities (174.9 percent); manufacturing (10.3 percent); and, information and communication (38.8 percent). “Bank lending to other sectors also increased during the month except in public administration, defense and compulsory social security, which declined by 0.8 percent,” BSP said. Despite BSP’s tighter watch of banks’ real estate exposure, top bankers believe real estate activities in the country will continue and that banks will help finance such projects.

In an interview two weeks ago, BPI president Cezar Consing and BPI executive vice president Dennis Montecillo said the Ayala-led universal/commercial bank can lend more for real estate activities. “We have grown the bank so much, so we can do more real estate, but as percentage to that total (loan portfolio), real estate is not that big,” added Consing. Meanwhile, the central bank has monitored a slower growth in household consumptoon, which slowed to 20 percent in September from 22.8 percent in August. The expansion in credit card loans, said BSP, was tempered by the slower growth in motor vehicle loans, salary-based general purpose loans and other types of household loans. Overall, outstanding loans of commercial banks, net of RRP placements with the BSP, in September have grown by 21.1 percent from 20.4 percent in August. Similarly, bank lending inclusive of RRPs increased by 20.1 percent from 17.9 percent in the previous month. “Going forward, the BSP will continue to ensure that the expansion in domestic credit and liquidity conditions proceeds in line with overall economic growth while remaining consistent with the BSP’s price and financial stability objectives,” the central bank concluded.

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