Consumer-lending of various banks showed a 25.1-percent expansion to P902 billion in 2014, sharply higher than year-ago loans aggregating only P721.5 billion, according to the Bangko Sentral ng Pilipinas (BSP).
The numbers are a validation of the regulatory view that the economy is not only flush with liquidity, but that the demand for credit is being adequately served by the country’s universal, commercial and thrift-bank units.
These activities helped the $272-billion Philippine economy achieve local expansion, measured as the gross domestic product (GDP), averaging 6.1 percent for the period and considered one of the fastest in the region.
Such lending redound to growth 6.2 percent higher than bank loans of only P849.6 billion at end-September 2014. “This sustains the quarter-on-quarter growth in consumer loans that began in 2008,” the BSP said.
Consumer loans pertain essentially to car purchases, the acquisition of homes and credit-card purchases.
They account for 15.9 percent of the total lending portfolio of the various 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 P398 billion as of end-December. This was followed by auto loans at P230 billion, and credit-card receivables at P164 billion. Salary loans, meanwhile, hit P62 billion during the period. Other consumer loans, which are not classified, hit P47.88 billion.
The BSP also said the banks were well-insulated against losses, as the ratio of nonperforming consumer loans decreased to 4.8 percent at end-2014, from 5.3 percent a year earlier. Universal, commercial and thrift banks also provisioned for 60.6 percent of their nonperforming consumer loans as a cushion for potential credit losses.
Also, the total consumer-loan exposure of Philippine banks, at 15.79 percent, was ranked lowest among the original five countries making up the Asean.
At end-2014, the soured loans ratio was highest in Malaysia, averaging 57.8 percent, followed by Indonesia’s at 28.3 percent, then Thailand’s at 27.8 percent and, finally, Singapore’s at 25.7 percent.
