ONE out of five households in the country availed of loans in the last 12 months, mainly to purchase basic goods, a recent survey by the Bangko Sentral ng Pilipinas (BSP) showed.
The third quarter Consumer Expectations Survey of the central bank showed that 22.6 percent of their respondent households have availed of a loan in the last year.
Data from the survey also showed that household respondents used their loan proceeds in the last 12 months mostly to purchase basic goods, with 56.5 percent of households saying this was their intended purpose for the loan.
About 24 percent of households who took out a loan, meanwhile, said the proceeds will be used for business start-up or expansion and 12.8 percent of respondents said it was for payment of their other debts.
Meanwhile, 9.2 percent of households said they took out a loan for health-related expenses and 7.6 percent for purchase of motor vehicles.
The households that took out loans during the period mostly belonged to the middle income group.
The BSP data showed that 40.4 percent of the households that availed loans were in the middle-income group while 33 percent were from the low-income group and 26.6 percent were from the high-income group.
By geographical area, the percentage of households that availed of a loan in the last 12 months was higher in the areas outside the National Capital Region (NCR).
Banks not top lender
WHILE a significant portion of households took out loans during the year, the BSP data also showed that banks were not Filipino households’ choice to borrow money from.
In particular, relatives and friends remained the top loan providers in the third quarter survey period with 30.7 percent of all household borrower loaning from their immediate circle. This was followed by lending companies at 16.9 percent, individual money lenders at 13.7 percent and cooperatives at 9.2 percent.
Only 7.9 percent of respondent borrowers said they took out loans from banks while 7.6 percent said they took out loans from government institutions.
Majority of loans availed by households, at 79.2 percent, were uncollateralized.
Meanwhile, households that availed of a secured loan used the following assets as collaterals: ATM account at 5.9 percent; real property at 1.8 percent; land at 1.6 percent; and, stock certificates or post-dated checks at 1.5 percent.