Up 22% yr-on-yr in March
BANKS in the Philippines are now a great deal more exposed to real estate than a year ago. Data from the Bangko Sentral ng Pilipinas (BSP) showed that on year-on-year comparison the exposure at the end of March this year was 22 percent greater and the bulk of it in loans to property developers.
The data also showed that non-performing loans (NPLs) to the real estate sector increased marginally to P28.38 billion in January-March period from P28.10 billion in the corresponding period of 2015. However, its share of total loan portfolio declined from 2.5 percent in the previous year to 2.1 percent.
The total exposure of the banks to the real estate sector translated as P1.55 trillion at the end of the first quarter 2016, up P280 billion from P1.27 trillion a year ago. Thus, it accounted for 20.7 percent of the banks’ total loan portfolio (TLP) during the period, compared with 19.4 percent a year ago.
Loans made up 85.6 percent of the banks’ real estate exposure (REE) while securities investments accounted for the remaining 14.3 percent. The loan component of the total exposure rose by 21.8 percent to P1.33 trillion from P1.09 trillion a year earlier.
Investments in real estate securities, meanwhile, grew by 23.5 percent to P222 billion at the end of March from P180 billion a year earlier.
The central bank data also showed that non-performing loans (NPLs) to real estate increased to P28.38 billion in January to March period from P28.10 billion in 2015.
The BSP said it monitors the REEs of commercial, universal, and thrift banks as part of its broader role of assessing the quality of bank exposures to the different sectors of the economy.