Consumer loans topped banks’ credit portfolio in H1
Loans to consumers outpaced the growth in total credit extended by major banks at the end of the first semester of 2013 due to strong demand from households that sought to buy new cars and homes, among other items.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that consumer loans granted by universal, commercial and thrift banks grew by 15.9 percent at the end of June to P680.4 billion, from the P587 billion reported in the same month last year.
The growth in consumer loans outpaced the expansion in the total loan portfolio of major banks, which stood at 12.3 percent at the end of June.
“Residential real estate, auto, credit card, and other consumer loans rose in June amid upbeat consumer view of the property market and the opening of classes,” the central bank said in a statement.
While consumer lending continued to rise, a decline was noted in the ratio of soured consumer loans as a proportion of the total, the BSP said. Nonperforming consumer loans represented 6.1 percent of total consumer loans in June. This was lower than the 6.7 percent recorded in the same month last year.
The BSP said banks continued to put in place adequate safety nets against possible losses from consumer loans. In June, universal, commercial and thrift banks set aside reserves to cover as much as 69.4 percent of their total loans.
Nonperforming consumer loans represent just 1 percent of the banks’ total loan portfolio for the period.
About 43.2 percent of all consumer loans went to real estate, 22.5 percent for car purchases, 22.1 percent for credit card transactions, and 8.75 percent for other consumer loans, representing purchases of appliances, electronics and other durable goods.
As a percentage of total lending, consumer loans in the Philippines remained well below the average in Southeast Asia. Consumer loans in the Philippines represented 16.6 percent of the banking industry’s total loans. This was lower than Malaysia’s 56.9 percent, Indonesia’s 29.3 percent, and Singapore’s 26.5 percent.
