MANILA (Mindanao Examiner / July 23, 2014) – The Banko Sentral ng Pilipinas said consumer loans or CLs by universal, commercial or U/KBs and thrift banks or TBs stood at P735.1 billion at the end of the first quarter of the year.
The figure is 13.6% higher than the P647 billion in CLs recorded during the same period in 2013. The end-March figure, it said, also reflects a 2% growth from the P721.54 billion posted at end-2013. This sustains the quarter-on-quarter growth trend since 2008.
It added that CLs rose amid the strong demand for vehicles during the period leading to the holy week and the summer season. At end-March 2014, ALs reached P194.3 billion and 16.3% higher than the figure recorded a year earlier.
Residential real estate loans and credit card loans, on the other hand, rose at a slower pace during the period. While the consumer finance portfolio increased, the ratio of the banks’ non-performing CLs to total CLs slightly decreased to 5.2% at end-March from 5.3% a quarter earlier.
The U/KBs and TBs also set aside loan loss reserves of 70.5% of their non-performing CLs as a safety net against consumer credit risks. Moreover, the consumer loan exposure of the banks also remained low relative to their peers in the region. At end-March 2014, the consumer credit exposure in Malaysia stood at 58.1%; Indonesia, 28.4%; Thailand, 27%; and Singapore by 25.7%.
The Bangko Sentral ng Pilipinas said it looks into consumer financing by U/KBs and TBs as part of broader efforts to monitor the quality of the banking industry’s total loan portfolio. The maintenance of high loan quality is essential to achieving it’s objective of fostering financial stability.
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