Consumer loans up 15% to P500B as of June—BSP

MANILA, Philippines—Consumer loans from universal and commercial banks grew by a double-digit pace by the end of the first semester, driven by the growing liquidity of the lenders and moves of Filipino households to acquire assets.

The Bangko Sentral ng Pilipinas has reported that outstanding consumer loans from large banks in the country amounted to P500 billion as of end-June, up by 15 percent from P434.56 billion as of the same period last year.

According to the BSP, demand from Filipino households especially for residential properties and cars boosted the overall demand for consumer loans. Thanks to growing bank resources, aided by growth in deposits from the public, the lenders were able to meet demand from credit-worthy borrowers, the regulator said.

Of the outstanding consumer loans as of the end of June, P198.38 billion accounted for credit that supported purchase of houses. This was up 14 percent from P173 billion over the same period.

Officials said many Filipino households had the confidence to buy big-ticket items like residential properties due to higher incomes that have been fueled by remittances from the more or less 10 million overseas Filipino workers.

Automobile loans accounted for P128.22 billion of the total consumer loans as of the end of June. This was higher by 21 percent from P105.57 billion as of the same period last year.

The rising demand for and sales of automobiles aided by bank loans benefit the country’s car manufacturing industry, and car manufacturers have said sales aided by bank loans significantly lifted their revenues.

Credit card loans had a P121.20-billion share to the total consumer loans as of end-June. This was up by 6 percent from P114.19 billion year on year.

Regulators said the rising credit card receivables of banks indicated the sustained penchant of Filipino households and individuals for personal consumption.

Other types of consumer loans are those granted to aid in the purchase of items like appliances and furniture, and those that help pay hospital, education and other bills.

The BSP said these types of loans registered a 27-percent growth as of end-June, to P52.22 billion from P41.08 billion.

The central bank said the move of universal and commercial banks to extend more credit to individuals was done in a prudent manner, adding that the banks were able to maintain a comfortable level of exposure to defaults.

In fact, the BSP said, the average non-performing loan (NPL) ratio of the banks even dropped to 7.9 percent as of the end of June this year from 9.3 percent as of the same period in 2010.

The BSP said universal and commercial banks are expected to continue lending more to consumers given the sustained rise in their resources and profitability.