Consumer loans breach P1-trillion mark in 2015

The banking industry’s loans for consumer purchases and credit card use jumped 17.5 percent in 2015 to breach the P1-trillion mark for the first time.

Latest Bangko Sentral ng Pilipinas (BSP) data released Thursday showed consumer loans of universal, commercial and thrift banks reaching P1.061 trillion in 2015, up from P902.6 billion the previous year.

Universal and commercial banks’ consumer loans rose 13 percent year-on-year to P646.5 billion, while lending by thrift banks climbed faster at 25.4 percent to P414.4 billion.

In a statement, the BSP said consumer loans have been growing annually since 2008. “Consumer lending by banks continued to rise as the domestic economy sustained its growth amid the steady increase in overseas Filipino remittances, a growing business process outsourcing industry, the solid performance of the services sector, and heightened consumer spending and investing.”

Last year, total motor vehicle loans for the purchase of cars and motorcycles increased 32.1 percent to P303.9 billion.

Asean Automotive Federation data showed that in 2015, motor vehicle sales in the Philippines grew 23 percent to a record 288,609 units. Sales of motorcycles and scooters, meanwhile, zoomed 8 percent to 850,509 units, making the Philippines the only Asean country that posted year-on-year growth in terms of sales of two-wheel vehicles.

Loans for residential real estate last year climbed 11.5 percent to P444 billion.

Total credit card receivables, meanwhile, rose 9.1 percent year-on-year to P179.3 billion while salary-based general purpose consumption loans jumped 68.1 percent to a total of P104.3 billion.

As total consumer loans rose, the share of non-performing loans slightly declined to 4.5 percent at end-2015 from 4.8 percent the previous year.

“Universal, commercial and thrift banks also provisioned for 58.7 percent of their non-performing consumer loans as buffer for potential credit losses” in 2015, according to the BSP.

The consumer credit exposure of Philippine banks—the ratio of consumer loans against the total loan portfolio—stood at 16.6 percent as of the end of last year, which the BSP noted was the lowest compared to Malaysia, Thailand, Indonesia and Singapore.