Consumer loans rising since 2008

MANILA, Philippines – Consumer loans by universal, commercial (U/KBs), and thrift banks (TBs) reached P849.6 billion ($19.20 billion) by end-September 2014, the Bangko Sentral ng Pilipinas (BSP) reported Tuesday, February 17.

The period’s figure is 5.7% higher than the P804 billion ($18.17 billion) posted a quarter earlier in 2013.

This sustains a quarter-on-quarter growth in consumer loans since 2008, BSP reported.

Residential real estate and auto loans buoyed the quarter-on-quarter increase in consumer loans.

Credit card loans rose, but a slower pace during the same period.

BSP reported in January that sustained growth in auto loans, along with other types like salary and personal loans, contributed to the expansion of loans for household consumption by 19.9% in December, though slightly down from November’s 21.5%.

A Nielsen survey released last month also showed that consumers in the Philippines (32%) and Singapore (31%) are focused on paying their debts and loans.

Consumer loans manageable

While the consumer finance portfolio expanded, U/KBs and TBs kept the level of their non-performing consumer loans manageable, BSP said.

The banks’ non-performing consumer loans represented 4.9% of their total consumer loans in third quarter 2014, a slight decrease from the 5% recorded a quarter earlier.

As a safety net against consumer credit risks, the banks likewise set aside loan loss reserves of 64% of their non-performing consumer loans.

The banks’ consumer credit exposure relative to total loan portfolio of 16.7% remained low compared to their regional peers, BSP said.

As of end-September 2014, the consumer loan exposure in Malaysia was at 54.1% followed by Indonesia at 28.2%; Thailand, 27.7%; and Singapore, 25.7%. – Rappler.com


Smart, compact car image from Shutterstock