BSP tightens watch on banks’ property loans
To avoid a property bubble, the Bangko Sentral ng Pilipinas has put in place stricter oversight of bank exposure in real estate financing.
In a statement, the BSP said the Monetary Board, its highest policymaking body, recently approved “enhancements to the prudential reporting requirements in order to strengthen oversight of banks’ real estate and project finance exposures.”
“The reportorial enhancements form part of BSP’s macroprudential toolkit and are being deployed to sharpen the BSP’s assessment of banking system exposures to the property sector,” it explained.
Specifically, the BSP ordered banks to report detailed information on real estate loans not only to socialized and low-cost housing but also to the mid- and high-end segments.
Also, the BSP ordered banks to report commercial real estate loans, including those covering commercial-built residential units, office buildings, shopping malls as well as factories and manufacturing plants and facilities.
“Universal and commercial banks (U/KBs) shall also be required to submit a new Report on Project Finance Exposures which shall include information in terms of type of infrastructure project and project phase. This report will enable the BSP to obtain a better grasp of the extent and quality of U/KB exposures to project finance, especially since demand for project finance is expected to increase and gain further traction as the country moves toward achieving its infrastructure goals,” the BSP said.
The BSP ordered the submission of the new reports beginning the second quarter of this year. —BEN O. DE VERA
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