The country’s real estate developers still get sufficient financing coming from local banks despite fears of property bubble.
During the BDO-The Asset real estate forum held on Wednesday, Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said that there’s no definitive evidence of asset price bubbles in the country’s property market, as demand remains supported by growth.
“BSP is closely monitoring banks’ exposure to property sector and as of now,” Guinigundo said, citing that there is still a potential upside in the Philippine property sector, given that it is still one of the cheapest in Asia.
“On the basis of the numbers, the likelihood of over building in the real estate sector is still quite remote, but it is important for all players—the banks, the investors, the developers—to be more vigilant, to be more circumspect in their decision. It’s better to consolidate your gains today than expand in a very big, big way,” he told reporters after the forum.
Guinigundo also said that the country’s strong economic fundamentals and improved monetary conditions are factors that have been supporting the growth of the property sector.
“The real estate sector fulfills the fundamental need for adequate and safe housing for our people, ensuring that every family has a place to live and that any person can attain good standard of living,” he said. “The housing market has the potential to generate growth, real estate is also vital in supporting the needs of vital sectors like BPOs [business process outsourcing],” he further said.
He also emphasized that besides remittances and BPOs, construction and manufacturing have been driving the engine of growth in the real estate market. “Instead of worrying, we sought greater discipline in our policy choices including tighter overall credit standards in real estate loans and stricter oversight banks’ of real estate exposure, we’re closely looking at banks for possible signs that conditions are right for propagating an asset price bubble,” Guinigundo added.
Madelaine B. Miraflor