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Consumer loans rise 16.9% in Q3 last year – Bangko Sentral

Posted On 2014 Feb 12
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An employee counts Philippine pesos inside a money changer in Manila September 19, 2013. A Philippine official said a weaker peso will benefit Philippine exporters by making their products less expensive and thus more competitive in the global market.

An employee counts Philippine pesos inside a money changer in Manila September 19, 2013. A Philippine official said a weaker peso will benefit Philippine exporters by making their products less expensive and thus more competitive in the global market.

MANILA  (Mabuhay) – Consumer loans extended by Philippine banks rose in the third quarter of 2013 due chiefly to higher credit for housing purposes, Bangko Sentral ng Pilipinas said in a statement Monday.

Banks’ consumer loans increased by 16.9 percent to P7062.6 billion in July to September year-on-year, the central bank reported.

Quarter-on-quarter, consumer loans went up 3.3 percent.

According to Bangko Sentral, the rise in credits extended to consumers was supported by an increase in residential real estate loans.

Households continued to put money in residential properties, seizing the “slow rise” in the cost of construction materials, the central bank added.

Credit card loans rose at a slower pace on seasonal trends due to “the lean season,” said Bangko Sentral.

Bad consumer loans

Despite the rise in consumer loans, “banks managed” an increase in bad credit, the central bank noted.

Soured consumer loans in the third quarter accounted for 6.13 percent of total credits extended to households, up slightly from 6.09 percent in the previous quarter.

Banks have set aside reserves equivalent to 67.8 percent of soured loans as buffer against consumer credit risk, Bangko Sentral noted.

Non-performing consumer loans account for percent of  the loan portfolio held by the banking industry.

“The consumer credit exposure of…banks remained low compared to regional peers,” the central bank said.

Consumer loans exposure Malaysian banks stood at 57.1 percent, while Indonesia’s was at 28.8 percent.

In the case of Thailand and Singapore, exposure to consumer loans were at 26.8 percent and 26.4 percent, respectively.

Bangko Sentral said it is monitoring “… the quality of all types of bank loans as part of efforts to promote high credit standards… [and] fostering financial stability.” (MNS)

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