The global financial meltdown has turned overseas Filipinos jittery in buying homes for their households, dampening prospects on local banks’ consumer lending.

The country’s two biggest thrift banks recorded contractions in overseas Filipinos’ housing loan applications in October—15 percent at BPI Family Savings Bank and 20 percent at Philippine Savings Bank (PSBank).

It was the first time in about five years that the banks had seen a decline in new loan application from overseas Filipinos. That sector used to provide lucrative business for banks, particularly remittances and consumer lending.

“The drop has been quite visible,” PSBank’s Pascual Garcia III said in an interview with the Philippine Daily Inquirer on Thursday.

“We won’t feel it immediately because there were (new loan) bookings done three or six months back,” BPI Family Bank vice president for retail mortgage division Jocelyn Sta. Ana said in a separate interview. “They have already made their down payment. But in terms of new loan applications, there is a drop.”

Consumer lending by banks in the Philippines grew by 20 percent last year, fueled by overseas Filipinos keen on buying homes. It was earlier reported that overseas Filipinos accounted for as much as 60 percent of new loan transactions with the country’s biggest thrift banks last year.

Given the gloomy global environment, Garcia said the whole banking sector would be lucky to attain a 10-percent growth in overall consumer lending next year.

“This may continue as they adjust to what’s happening worldwide,” Garcia said. “Some have lost their jobs, and even those who haven’t, they are nervous and would thus rather postpone making major decisions.”

Garcia said, “Until the job situation stabilizes, you will probably see them refraining from [making] these kinds of purchases and investments.”

Sta. Ana said it was unsure whether the slump in October was the beginning of a downtrend. “Housing is still a basic need of any Filipino family, so there will still be a need for people to get durable goods,” she said

Filipinos based in the US were the ones seen to be hardest hit by the global financial meltdown.

“We heard that some have cancelled purchases with (property) developers,” Garcia said.

Remittances from overseas Filipinos, however, have remained robust this year despite the global crisis. In the first nine months, remittances reached $12.3 billion, or 17.1 percent higher than the level in the same period a year ago, based on the latest report of the central bank. With editing by INQUIRER.net