Real estate loans rise
BIG BANKS handed out more loans to the volatile property sector during the first quarter to outpace the growth in total credit extended by the lenders from a year ago, data from the Bangko Sentral ng Pilipinas (BSP) showed.
Local banks hiked their real estate exposure to P1.318 trillion as of end-March, surging by 21.6% from the P1.084 trillion in real estate borrowings during the same period in 2016. The growth outpaced a 19.3% increase in the banks’ total loan portfolio, according to central bank data.
Total loans granted by universal and commercial banks surged to P6.751 trillion during the first quarter, well above the P5.66 trillion tallied during the comparable year-ago period.
Both home loans and commercial borrowings grew by over a fifth, which brought the share to total loans slightly higher at 19.5% from 19.2% a year ago.
Residential loans posted a 21.3% increase in March, rising to P322.9 billion from P266.1 billion previously. Credit lines for socialized and low-cost housing grew by 14% to reach P71.56 billion, while other types of home loans jumped by 23.6% to P251.34 billion.
Housing prices stood barely changed at end-2016 from the previous year as rates moved up by a mere 0.3% during the fourth quarter, according to the BSP’s latest residential real estate price index.
Meanwhile, property loans extended to corporates likewise inched up to P994.85 billion as of March, up by 21.7% from the past year’s P817.78 billion. This accounted for 75.5% of the banks’ total real estate exposure. Broken down, land developers and construction firms hiked their bank borrowings by 23.2% amounting to P528.87 billion, which will be used to build residential units, office buildings, condominiums, shops, and factories, to name a few.
Other enterprises also borrowed P465.98 billion as of the first quarter, up by 19.9% from a year prior.