Banks will now have to submit regular residential real estate lending reports to the central bank, which is looking to generate a price index aimed at averting property bubbles.
The Bangko Sentral ng Pilipinas (BSP) on Wednesday said that the Monetary Board last October 29 approved a circular requiring all universal/commercial banks and thrift banks to submit quarterly reports on approved residential real estate loans (RRELs).
“Information from RRELs will provide information for the generation of a residential real estate price index (RREPI),” the central bank said.
The RREPI is an initiative aimed at ensuring that the banking sector’s property exposure remains manageable. The index will allow the central bank to track property prices, initially in Metro Manila and neighboring provinces and eventually across the country.
It will also produce a breakdown of prices as the residential and commercial property sectors are driven by different dynamics.
“The construction of RREPI based on banks’ approved housing loan applications is a first in the Philippines and is expected to provide a valuable tool in assessing the real estate and credit market conditions in the country,” the central bank explained.
It noted that the availability of data on property prices was one of the information gaps identified in a Group of Twenty report following the global financial crisis. This is also included in the Special Data Dissemination Standard Plus categories under financial soundness indicators that International Monetary Fund-member economies should adhere to within five years from the time they signify their intent to participate in the global undertaking.
For each RREL granted, respondent banks should report the month the loan was granted/booked, location of property, type of property, type of housing unit, appraised value of the housing unit per square meter, floor area of the housing unit and the number of floors.
Other required data include the number of bedrooms, effective age of the housing unit, appraised value of lot per square meter, total area of lot, total appraised value of property, housing segment, acquisition cost and the name of developer.
The central bank stressed that the data covers areas both inside and outside the National Capital Region.
“The initial submission, after the issuance of the circular, shall cover the second quarter and third quarter of 2015 and shall be submitted on or before 29 December 2015. The submission for the fourth quarter 2015 shall follow the prescribed submission on the 20th banking day from the reference quarter,” the central bank said.