The banks’ real-estate exposure—essentially real estate loans and real- estate investments—continued to rise in the third quarter despite stricter monitoring from the Bangko Sentral ng Pilipinas (BSP).
Data from the Central Bank showed the banks’ total real-estate loans aggregated P1.8 trillion as of end-September.
This represented a steady rise from the previous quarter’s P1.23-trillion exposure in real estate.
Lender loans and investments to the real-estate sector both rose during the quarter, with real-estate loans still comprising the bulk of the banks’ exposure to the property sector. Real- estate loans hit P1.7 trillion in September, up from only P1.64 trillion the
previous quarter.
Investments to the real-estate sector, meanwhile, accounted for the remaining P90.5 billion, up from P85.76 billion in the previous quarter. Warnings have been issued earlier, particularly from the International Monetary Fund, on the high level of loans focused on a particular sector.
The BSP, however, has since allayed fears of a bubble forming in the real-estate sector, saying everything was appropriately kept in check.
The Central Bank increased its monitoring of the banks’ exposure to real estate to protect the lending industry from any unwarranted price expansion in this particular asset class.
Also earlier, the BSP conducted so-called stress tests on banks and launched the residential real-estate price index to show the rate at which property prices in the country was rising.