Consumer lending up in 2015, hits P1 trillion – BSP

MANILA, Philippines – Continued economic growth has pushed up the level of bank loans to Philippine consumers in 2015, sustaining the year-on-year growth in consumer loans since 2008, according to the Bangko Sentral ng Pilipinas (BSP).

BSP data released on Thursday, May 5, showed that universal, commercial (U/KBs) and thrift banks (TBs) reported P1.061 trillion in consumer loans at the end of December 2015, a 17.5% rise from P902.6 billion in the same period in 2014.

The increase in consumer loans last December was driven mainly by motor vehicle and residential real estate loans, both signs of economic progress, the BSP noted.

Motor vehicle loans, both for cars and motorcycles, rose by 32.06% to P330.89 billion last year from P230.12 billion in 2014, while residential real estate loans grew by 11.5% to P444.02 billion from P398.23 billion in 2014.

Furthermore, salary-based general-purpose consumption loans rose sharply by 68.1% to P104.32 billion last year from P62.05 billion in 2014.

Non-performing consumer loans of banks hit 4.5% of their total consumer loans at end-December last year, a slight decrease from the 4.8% posted a year earlier.

Banks also set aside 58.7% of their non-performing consumer loans as cover for potential credit losses during said period, the BSP said.

Trailing ASEAN-5 neighbors

Despite the increases, consumer lending and exposure in the country continues to lag behind its neighbors.

As a percentage of total loan portfolio, the 16.6%-consumer credit exposure of Philippine banks remained the lowest among the 5 biggest economies of the Association of Southeast Asian Nations or ASEAN, the BSP said.

As of-December 2015, consumer lending exposure in Malaysia stood at 56.8%; Thailand, 28.8%, Indonesia, 28.0%, and Singapore, 26.6%.

The International Monetary Fund, however, has forecast Philippine economic growth to outstrip the rest of the ASEAN-5 in 2016. –