Consumer loans post double-digit growth

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) reported yesterday that loans extended by banks operating in the Philippines to Filipino consumers jumped 15 percent in the first half of the year on the back of double-digit growth in real estate, automotive, and other consumer loans.

Data released by the BSP showed yesterday that consumer loans extended by universal, commercial, and thrift banks amounted to P500.01 billion from January to June this year or P65.45 billion more than the P434.55 billion disbursed to Filipino consumers in the same period last year.

Consumer loans extended by universal and commercial banks surged 16.8 percent to P309.66 billion in the first semester from P265.01 billion in the same period last year while that of thrift banks rose 12.3 percent to P190.35 billion from P169.54 billion.

The industry’s total loan portfolio increased by 19.25 percent to P3.22 trillion from January to June this year compared to P2.7 trillion in the same period last year. The industry’s non-performing loans (NPLs) or soured loans retreated by 5.3 percent to P129.37 billion from P136.6 billion.

Likewise, the banking industry’s loan loss reserves posted a double-digit growth of 10.8 percent to P27.79 billion in the first half of the year from P25.08 billion while non-peforming commercial loans slipped by 2.04 percent to P39.49 billion from P40.31 billion.

The BSP also reported that residential real estate loans increased by 14.2 percent to P198.38 billion in the first half of the year from P173.72 billion in the same period last year while auto loans surged 21.5 percent to P128.22 bilion from P105.56 billion.

The central bank said other consumer loans to finance personal and household needs such as purchase of appliances, furnitures, and fixtures or to pay taxes, hospital, and educational bills jumped 27.1 percent to P52.21 billion from P41.1 billion.

The Third Quarter 2011 Senior Bank Loan Officers’ Survey conducted by the BSP showed that there is sustained demand for loans from enterprises and households despite the economic slowdown in the first half of the year amid the cautious spending by the Aquino administration as well as the weak global trade.

Data showed an overall net change of 21.4 percent in demand for loans or credit to enterprises for the third quarter and a net change of 33.3 percent in the demand for loans to households.

The survey showed an overall net tightening of credit standards for loans to enterprises particularly for top corporations due to financial system regulations and banks’ reduced tolerance for risk as well as the degree of competition from other banks and non-bank lenders.

On the other hand, the credit standards for loans to households showed overall net easing in the third quarter relative to the second quarter while respondent banks reported unchanged credit standards for credit card, auto, and personal or salary loans.

The BSP has been conducting this survey since 2009 to enhance its understanding of banks’ lending behavior, which is an important indicator of the strength of domestic economic activity. The survey also helps the BSP assess the effectiveness of bank lending as a transmission channel of monetary policy.

Latest data showed that bank loans jumped 19.8 percent to P2.616 trillion as of end-August from a year-ago level of P2.184 trillion as demand for loans continue to increase amid the slowdown in economic growth in the first half of the year.