Consumer loans rising but banks’ exposure remains manageable, says BSP

Consumer loans granted by the banking sector continued to increase, reaching P932.8 billion in the first quarter of this year, the Bangko Sentral ng Pilipinas (BSP) said in a statement.

This has sustained the quarter-on-quarter growth in consumer loans that began in 2008.

The Bangko Sentral said the consumer loans extended by universal, commercial and thrift banks increased 3.36 percent to P932.8 billion as of end-March this year from P902.5 billion in the last quarter of 2014.

“Consumer lending during the first quarter was lifted by an increase in residential real estate loans and continued growth in auto loans,” the Central Bank said.

Consumer loans also includes credit card receivables, salary loans, and other loans.

Despite the increase, the banking sector has kept the level of non-performing loans manageable.

As of end-March, the Bangko Sentral said the banks’ non-performing consumer loans represented 4.9 percent of their total loan portfolio.

Non-performing loans in the last quarter of 2014 comprised 4.8 percent of total consumer loans.

The banks has also set aside provisions for 62.2 percent of their non-performing loans as a cushion for potential credit losses.

Moreover, the banks’ consumer credit exposure of 16.7 percent of total loan portfolio remained lower than those of their peers in the Association of Southeast Asian Nations (Asean).

As of end-March this year, Malaysia’s exposure was reported at 53.8 percent while Indonesia reported an exposure of 28.6 percent.

Thailand’s exposure was 27.7 percent while Singapore’s was 25.8 percent.

The Bangko Sentral monitors the quality of all types of bank lending to ensure the banks’ adherence to high credit standards and foster financial stability.