No property bubble in PH, says Bangko Sentral chief

THE PHILIPPINE real estate sector is far from overheating such that no property bubble is seen bursting here, according to Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr.

“There is no evident sign of a bubble in the real estate sector today,” Tetangco told reporters last Friday on the sidelines of the signing of a memorandum of agreement that will facilitate information sharing between the interagency Financial Stability Coordination Council and the Housing and Land Use Regulatory Board.

“You see, there continues to be a strong demand for housing, a large part is due to the favorable demographics in the country. We have a young and economically active population,” Tetangco pointed out.

The BSP chief said he believed that “the progress of the housing sector is expected to be sustainable.”

For instance, amid bad traffic, Tetangco noted that people right now wanted to have a home close to their workplace, which meant an additional demand for property.

Also, there is a burgeoning BPO sector, which has driven a strong demand for commercial space,” Tetangco added, referring to the business process outsourcing industry, a top dollar earner for the country.

“All of these put together, we can say that the real estate sector is in a good position at this point,” the BSP chief said.

As far as the banking sector’s exposure to real estate was concerned, Tetangco said banks have been quite prudent in providing loans to real estate buyers as well as real estate developers.

The latest BSP data showed that big banks’ outstanding real estate loans further increased to P1.14 trillion at the end of the first half amid sustained strong demand for properties.

Lending by universal and commercial banks to the real estate sector as of end-June rose from P1.08 trillion a quarter ago and P950 billion a year ago.