MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has exceeded last year’s income target from the sale of foreclosed assets it acquired from banks despite lower property prices.
According to its annual financial report, the Bangko Sentral ng Pilipinas (BSP) sold of a total of 2,498 foreclosed assets last year, 46 percent higher than the previous year’s level. These assets were value at P1 billion, higher than the P673 million target.
Inclusive of interest and maintenance of assets, the BSP earned P508.27 million, marking a 28-percent improvement from 2011.
A total of 30,248 properties, valued at P12.1 billion, remained under the BSP’s balance sheets. The value of the real estate titles actually declined 3.5 percent from the previous year.
“The BSP ensures that assets acquired through foreclosures and dacion en pago agreements and real properties not used in operations are administered, maintained and preserved to enhance their value prior to disposal,†the report said.
Despite their generally healthy position, lenders still borrow money from the BSP through various facilities in order to augment funds used for lending to consumers.
Banks that borrow money from the BSP—either through its repurchase, rediscounting or loan facilities— usually use their receivable real properties as collateral. Upon failure of these banks or their borrowers to pay the loan, these assets are foreclosed in favor of the BSP.
In some cases though, banks enter into a dacion en pago agreement with the BSP, where banks use their real property assets, instead of cash, to pay for their loans.
The central bank’s Committee on Disposal of Real Properties, according to the report, sold the assets through a public bidding, negotiated sale, housing program, redemption by original owner or through transfer to the Government as dividends.