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Banks' Consumer Credit Continues to Expand


Consumer loans (CLs) by universal, commercial (U/KBs) and thrift banks (TBs) stood at Php 721.54 billion at end-2013, a 14.65 percent increase from the Php 629.34 billion recorded a year earlier.

The end-2013 figure is also a 3.57 percent rise from the Php 702.56 billion posted a quarter earlier. This sustains the quarter-on-quarter growth trend since the current reportorial template was introduced in 2008.

Comprising the bulk of CLs at end-2013 was residential real estate loans. Figures suggest a notable increase in the purchase or rent of residences near business districts by young professionals, of luxury homes (condominiums) by high-income expatriates, and of RE properties for the use or investment by Overseas Filipinos. Auto loans, credit card receivables and other CLs also rose during the period.

U/KBs and TBs, however, continued to manage non-performing CLs amid the rise in consumer credit. The banks’ non-performing CLs represented 5.34 percent of their total CLs at end-2013, lower than the 6.13 percent registered during the third quarter last year.

U/KBs and TBs also provisioned for 70.60 percent of their non-performing CLs as a cushion for potential credit losses. Non-performing CLs represented less than one percent of the banks’ total loan portfolio during the period.

Moreover, the banks’ consumer credit exposure of 15.8 percent remained low compared to their ASEAN 5 peers. At end-2013, the CL exposure in Malaysia was at 60.9 percent followed by Indonesia, 28.8 percent; Thailand, 27 percent; and Singapore, 26 percent.

The Bangko Sentral ng Pilipinas (BSP) monitors consumer and other types of bank lending to ensure the banks’ adherence to high credit standards. This is essential to the BSP’s key objective of fostering financial stability.

View Table 1 | Table 2

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