Home, auto buyers drive 27% consumer-loan rise

The country’s appetite for consumer loans continued to expand in the quarter ended March this year, the service having grown nearly 27 percent to P932.8 billion, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.

This development relates in the main to bank borrowings for the purchase of residential houses and cars, including even consumer purchases with the use of credit cards.

The various banks reported consumer loans totaling only P735.1 billion a year earlier.

“This sustains the quarter-on-quarter growth in consumer loans that began in 2008,” the BSP said.

Consumer loans comprise 16.7 percent of the total lending portfolio of universal, commercial and thrift banks in the country.

“The BSP monitors consumer and other types of bank lending to ensure the banks’ adherence to high credit standards. This is essential to fostering financial stability, which is a key policy objective of the BSP,” the central bank said.

Residential real-estate loans still have the largest share of consumer loans across components, which hit P411.4 billion as of end-March this year.

This was followed by auto loans at P244.6 billion and credit-card receivables at P159.8 billion. Salary loans, meanwhile, hit P76.1 billion during the period.  So-called other consumer loans hit P40.8 billion.

The BSP also noted that banks proved prudent and well-insulated against losses as their ratio of soured or nonperforming consumer loans hit 4.9 percent, practically unchanged from 4.8 percent a quarter earlier.

Universal, commercial and thrift banks also provisioned for 62.2 percent of their nonperforming consumer loans as cushion for potential credit losses down the line.

Moreover, the BSP said the banks’ consumer credit exposure of 16.7 percent of total loan portfolio remained lower than their Asean peers.

“At end-March 2015, the consumer loans exposure in Malaysia was at 53.8 percent; followed by Indonesia at 28.6 percent; Thailand, 27.7 percent; and Singapore, 25.8 percent,” the BSP bared.



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Bianca Cuaresma graduated cum laude from the University of Santo Tomas (UST) with a degree in AB Journalism. She was with the BusinessMirror during her internship in 2012 where she was assigned at the Department of Foreign Affairs (DFA) beat. She continued to be of service to the paper after she graduated in 2013. In 2014, she was awarded as the Reporter of the Year by the paper for her coverage in the Bangko Sentral ng Pilipinas (BSP). She is a BusinessMirror reporter for 3 years now, and has covered general assignments and agencies related to banking and finance in the country.