Jan 052015

MANILA, Philippines – More households borrowed from local banks as of the third quarter of 2014 to pay for their home and car purchases, Bangko Sentral ng Pilipinas data showed.

Consumer loans rose 21 percent to P849.7 billion as of end-September last year from P702.6 billion in the same period in 2013. The latest level is also six percent higher than the P804.1 billion recorded in end-June.

The increase was driven by a 25-percent jump in residential real estate loans to P382.5 billion from P306.4 billion and a 20-percent climb in auto loans to P217.4 billion from P181.1 billion.

BSP data also showed credit card receivables went up three percent to P156.5 billion as of end-September from P151.9 billion in the same period in 2013, while other consumer loans slid 28 percent to P45.7 billion from P63.1 billion.

Salary loans or those granted to individuals on the basis of their regular salary, pension, or other compensation amounted to P47.6 billion in end-September, central bank data also showed.

The BSP only started monitoring salary loans as a separate category under consumer loans in end-June last year.

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Consumer loans have been rising in the last few years, supporting domestic consumption which remain as the major driver of the Philippine economy.

In end-September last year, household loans made up 16.68 percent of the banks’ total loan portfolio.

Non-performing consumer loans, meanwhile, amounted to P42 billion in end-September, about five percent of the total household loans during the period. This figure is two percent below the P43 billion recorded in the same period in 2013.

In relation to the banks’ total loan portfolio, non-performing consumer loans only accounted for 0.82 percent in end-September last year.

However these soured household loans made up 34.31 percent of banks’ total non-performing loans.

The BSP monitors credit and liquidity conditions in order to make are they are in line with the central bank’s price and financial stability mandates.

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