Consumer loans rise by 25% in 2014 to P902 billion

MANILA, Philippines – Consumer loans (CLs) by universal and commercial banks (U/KBs) as well as thrift banks (TBs) stood at P902.6 billion ($20.1 billion) at end-2014.

This represents a 25.1% increase from the P721.5 billion ($16.09 billion) recorded a year earlier, based on data released on June 4 by the Bangko Sentral ng Pilipinas (BSP).

The end-2014 figure is also a 6.2% increase from the P849.6 billion ($18.9 billion) posted a quarter earlier, sustaining the quarter-on-quarter growth in CLs that began in 2008.

The CLs at end-2014 is comprised of residential real estate loans, auto loans, credit card receivables, salary loans, and other CLs.

While consumer lending expanded, the ratio of the banks’ non-performing CLs to total CLs decreased to 4.8% at end-2014 from the 5.3% registered a year earlier.

U/KBs and TBs also provisioned 60.6% of their non-performing CLs as a cushion for potential credit losses.

As a percentage of total lending, the 15.9% CL exposure of domestic U/KBs and TBs ranks the lowest among the original 5 ASEAN economies.

At end-2014, the CL exposure in Malaysia was at 57.8%, followed by Indonesia at 28.3%, Thailand at 27.8%, and Singapore, 25.7%.

The BSP monitors consumer and other types of bank lending to ensure the banks’ adherence to high credit standards essential to fostering financial stability. 

$1 = P44.79

Consumer credit application image from Shutterstock