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Consumer Loans Continue To Rise

05.10.2013

Consumer loans (CLs) by universal, commercial (U/KBs) and thrift banks (TBs) stood at Php 629.3 billion at end-2012, 4.7 percent higher than the Php 601 billion posted during the third quarter last year. The end-December figure is also a 15.3 percent increase from the Php 545.9 billion recorded a year earlier.

The rise in credit card, auto, residential real estate and other consumer loans was spurred by low and stable interest rates, managed inflation, the continued strength in the remittances of Overseas Filipinos, the growth in the Business Process Outsourcing industry and a healthy consumer outlook for the year.

Said banks’ non-performing CLs at end-2012 stood at Php 42.2 billion, up from the Php 41 billion registered during the third quarter of 2012 and the Php 37.5 billion at end-2011.

Risks from these soured loans are adequately provisioned for as U/KBs and TBs set aside 70 percent in loan loss reserves for non-performing CLs, which account for about one percent of their total loans in December.

Moreover, the CL exposures of banks are lower compared to their ASEAN counterparts. CL exposure in Malaysia is 55.6 percent; Indonesia, 30 percent; and Singapore, 27.5 percent.

BSP continues to monitor banks’ loan portfolio in line with its efforts to keep credit standards at high levels. This is vital to mitigating risks in the industry which is a key policy objective under the BSP’s Financial Stability agenda.

View Table 1  |  Table 2

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