MANILA, Philippines - Property exposure of banks has exceeded regulatory limits, but the Bangko Sentral ng Pilipinas (BSP) was quick to dispel fears of asset bubble forming.
Real estate exposure - the proportion of property loans against total loan portfolio - hit 20.86 percent last year using an expanded computation that dropped all exemptions and included securities issued to property firms.
The tally fell slightly above the 20-percent cap set by the central bank beginning in 1997 when a property bubble in Asia escalated into a full-blown economic crisis. BSP Governor Amando Tetangco Jr. said there is no cause for concern.
“We have to keep in mind that this is now based on the more comprehensive computation. This is now based on a more expanded definition,†Tetangco told reporters late Thursday. “It is not a cause for concern…There is no evidence of a bubble,†he added.
A total of P703.2 billion worth of property loans were granted by universal, commercial and thrift banks as well as trust departments last year, BSP data showed.
The figure included the amount granted to low-cost housing, loans to individuals as well as those supported by non-risk collaterals or guarantees, which were all exempted in the old calculation.
An additional P118.5 billion was also recorded as investments in property securities, whose inclusion to the new computation was part of the reform, BSP announced in August last year.
All these compared to the banks’ total loan portfolio that stood at P3.939 trillion, central bank figures showed.
Minus bond placements, BSP managing director Johnny Noe Ravalo said lenders’ exposure actually stood at 17 percent, below the ceiling but still up from previous year’s 14.5 percent when exemptions were still granted.
“We would continue monitoring this and see if there are shifts in the numbers down the road,†Ravalo said in the same briefing.