Consumer loans up 25% to P903B in ’14

Household loans continued to rise last year as more Filipinos borrowed to pay for their property and car purchases, according to data from the Bangko Sentral ng Pilipinas.

Consumer loans went up 25 percent to P902.61 billion last year from P721.54 billion in 2013. The latest level is also above the P629.34 billion seen in 2012 and the P545.88 billion recorded in 2011.

The increase was driven by a 24-percent climb in residential real estate loans to P398.23 billion from P320.45 billion and also a 24-percent rise in auto loans to P230.12 billion from P186.32 billion.

Credit card receivables, meanwhile, grew four percent to P164.31 billion last year from P157.39 billion in 2013. Other consumer loans fell 17 percent to P47.88 billion from P57.3 billion.

Salary loans or those granted to individuals on the basis of their regular salary, pension, or other compensation amounted to P62.05 billion last year. The BSP only started monitoring salary loans as a separate category under consumer loans in end-June last year.

BSP data showed consumer loans have been rising in the last few years, fueling domestic consumption which remains the major driver of the economy.

Last year, household borrowings made up 17 percent of the P5.45-trillion loan portfolio recorded by local banks.

Non-performing consumer loans, meanwhile, only amounted to P43.41 billion last year or about five percent of total household loans during the period. When measured against the total loan portfolio, non-performing consumer loans only amount to 0.8 percent.

The BSP monitors credit and liquidity conditions in order to make sure they are in line with the central bank’s price and financial stability mandates.

A central bank survey released in January showed credit standards for household borrowers were tightened for the fifth consecutive quarter in the fourth quarter of last year.

Respondent banks cited stricter regulations, reduced credit lines for auto loans, and wider loan margins for personal and salary loans as reasons for the tightening of credit standards.