Consumer loans rise 13.6% in Q1

MANILA, Philippines - Consumer loans extended by local banks climbed 13.6 percent in the first quarter as more households borrowed for the purchase of cars and real estate, data from the Bangko Sentral ng Pilipinas showed.

Loans extended to individuals and families or those for household expenses amounted to P735.102 billion as of end-March, higher than the P647.062 billion recorded in the same period last year.

Central bank data revealed consumer loans during the period made up 15.6 percent of banks’ total loan portfolio net of interbank loans.

The increase was due to the continuous rise in auto loans, credit card receivables, and borrowings made for real estate.

Auto loans went up 16.3 percent to P194.373 billion in the first quarter from P167.193 billion in the same period last year, while credit card receivables increased by 6.8 percent to P153.396 billion from P143.684 billion.

Residential real estate loans also rose 10 percent to P326.917 billion from P279.311 billion, while other consumer loans grew 6.2 percent to P60.417 billion from P56.874 billion.

BSP data showed non-performing consumer loans summed up to P38.209 billion in the first quarter, comprising 5.2 percent of the total consumer loans portfolio.

Loan loss reserves for consumer loans for the period reached P26.939 billion, the central bank also disclosed.

The continuous rise in consumer loans has supported domestic consumption, which has remained as the major driver of the Philippine economy.

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

The central bank earlier this month recounted households’ outlook on buying conditions for big-ticket items such as cars and real estate climbed to an all-time record high of 24.6 percent in the second quarter.

“The outlook on buying conditions for real estate was the most optimistic, posting a record high of 32.2 percent since Q1 2007. Meanwhile, a stable outlook was observed for buying conditions for consumer durables and motor vehicle,” the latest Consumer Expectations Survey read.