Banks’ Consumer Lending Continues to Grow

Manila—(PHStocks)—Universal, commercial (U/KBs) and thrift banks (TBs) reported PhP959.2 billion in consumer loans (CLs) for end-June this year. The figure is 2.8% higher than the PhP932.8 billion in CLs registered at end-March. This sustains the quarter-on-quarter growth in said loans that started in 2008.

CLs increased quarter-on-quarter in June due to an increase in auto loans, credit card receivables and salary loans. Residential real estate loans, on the other hand, declined marginally during the period.

BSPBangko Sentral ng Pilipinas (BSP) data also showed that the quality of CLs improved amid the rise in consumer lending. At end-June, the non-performing CLs of U/KBs and TBs represented 4.5% of total CLs, a decline from the 4.9% posted a quarter earlier.

U/KBs and TBs also provisioned for 61.2% of their non-performing CLs as buffer for potential credit losses during said period.

Moreover, as a percentage of total loan portfolio, the 16.7% consumer credit exposure of Philippine banks remained the lowest among the ASEAN 5 economies. At end-June 2015, the CL exposure in Malaysia was at 57.1%, followed by Indonesia at 28.3%, Thailand at 27.9% and Singapore at 25.9%.

BSP monitors the level and quality of consumer and other bank loans to ensure banks’ adherence to high credit standards. This is in line with the BSP’s supervisory efforts to promote sound credit risk management and financial stability.

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