Housing, auto loans rose 17-18% in 2011

Housing and car loans extended by banks registered double-digit growth rates in 2011 as a generally favorable outlook on future incomes boosted confidence of Filipino consumers to apply for bank loans and make big-ticket purchases.

These boosted overall spending by Filipino households in 2011, which allowed the Philippines to post growth despite contraction in export earnings.

Data from the Bangko Sentral ng Pilipinas showed that outstanding housing loans extended by universal, commercial and thrift banks amounted to P221 billion as of the end of 2011, or 17 percent higher than the P188 billion posted in 2010.

Outstanding bank loans meant to support purchases of automobiles reached P139 billion, up year on year by 18 percent from P118 billion.

The BSP said that banks kept prudent standards in extending housing and car loans. This was manifested by the drop in their exposure to bad debts.

Based on the official data released by the central bank, non-performing housing loans amounted to P9.56 billion, or 4.3 percent of the total outstanding housing loans. Loans are considered non-performing if they remain unpaid at least 30 days upon maturity.

The 4.3 percent non-performing housing loans ratio was an improvement from the 6.89 percent recorded in 2010. Non-performing auto loans amounted to P5.98 billion, or 4.3 percent of total auto loans, in the same period. This was better than the 4.6 percent registered in the previous year.

The rise in housing and auto loans came amid a favorable outlook by Filipino consumers on future household incomes and performance of the economy.

Results of a survey conducted by the BSP in the fourth quarter of last year showed that consumer confidence for the coming year stood at +14.6 percent.

A positive index showed that the number of respondents who believed their incomes and the economy’s performance will improve in the next 12 months outnumbered those who believed the contrary.

Monetary officials said the growth in housing and auto loans was also attributed to the rising liquidity of banks. The BSP also reported that credit card purchases by Filipinos also rose in 2011.

Credit card receivables of universal, commercial and thrift banks reached P132.24 billion by the end of last year, up year on year by nearly 10 percent from P120 billion.