Consumer loans (CLs) by universal, commercial (U/KBs) and thrift banks (TBs) rose to P647.1 billion in March 2013.
In a statement on Wednesday, the Bangko Sentral ng Pilipinas (BSP) said that the March figure is 14.8 percent higher than the P563.8 billion posted a year ago.
The BSP added that the quarter-on-quarter growth of the total commercial loans of U/KBs and TBs stood at 2.8 percent at end-March, which is consistent with the longer-term trend of a general increase in consumer lending.
“The rise in CLs was matched by a marginal decline in the ratio of soured CLs to total CLs,” it stated.
Meanwhile, the nonperforming commercial loans ratio as of March decreased to 6.2 percent from the 6.8 percent posted during the same month last year.
“These figures sustain the general rise in CLs vis-à-vis the gradual decline in nonperforming CLs since 2009, which contributes to the improvement of the CL quality of U/KBs and TBs,” the central bank added. Furthermore, the BSP noted that the favorable macroeconomic condition and continued inflow of dollar remittances can be attributed to the increase in consumer lending to auto, residential real estate and other commercial borrowers in March this year.
Industry figures, on the other hand, indicate that U/KBs and TBs have adequate safety nets against credit risks arising from consumer lending, as they set aside 68.7 percent of loan loss reserves to nonperforming CLs in end-March. Nonperforming CLs account for just 1 percent of the banks’ total loan portfolio (TLP).
Moreover, the BSP said that the percentage of bank commercial loans to total loan portfolio in the Philippines is lower compared to the country’s Southeast Asian peers. The Philippines’ 16.5-percent commercial loan exposure is less than Malaysia’s 54.1 percent; Indonesia’s 30.1 percent and Singapore’s 26.7 percent.
“The Bangko Sentral ng Pilipinas keenly monitors banks’ CL portfolio in line with efforts to keep credit standards at high levels amid a low interest rate environment. Maintaining high credit standards is key to mitigating systemic risks and to maintaining financial stability,” it said.