The real estate exposure of banks reached P1.331 trillion in the first quarter of 2016, driven by higher lending to the commercial sector, data from Bangko Sentral ng Pilipinas over the weekend show.
Banks lent the bulk or P1.326 trillion, while trust departments contributed P4.98 billion. Residential real estate loans for the quarter reached P462.396 billion, while commercial real estate loans stood at P869.008 billion.
The first-quarter figure, however, was lower than the end-2015 real estate exposure of P1.5 trillion. The end-2015 REE of banks was 5.9 percent higher than that posted by the banks a quarter earlier. The rise was attributed to the banks’ real estate loans, which grew by 6 percent to P1.3 trillion quarter-on-quarter.
Bangko Sentral monitors the real estate exposures of banks as part of its broader role of assessing the quality of bank exposures to the different sectors of the economy. Maintaining high loan quality is essential to the promotion of financial stability.
Earlier, Bangko Sentral Governor Amando Tetangco Jr. said he saw no asset bubble in the country despite the acceleration of residential real estate prices in the first quarter by 9.2 percent from 5.5 percent a year ago.
The Bangko Sentral released the maiden nationwide Residential Real Estate Price Index on June 3, 2016. The first-quarter growth was also significantly higher than the 5.1-percent expansion in the fourth quarter of 2015.
Tetangco also said that there was no cause for alarm in the acceleration of prices of condominium units.
“Not at all. They’ve somewhat slowed down in building. And some of the movements in each of the sectors, there’s some that have increased slowly than others. We want to look at the total picture. At this point in time, if you look at other indicators like building permits, there’s no bubble,” Tetangco said in a previous statement.
The index showed that real property prices in the National Capital Region and areas outside NCR increased 9.7 percent and 9.4 percent, respectively. Condominium units posted the highest year-on-year growth in prices at 12.9 percent, followed by townhouses at 8.5 percent.
The index showed that about 7 out of 10 residential real state loans granted were for the purchase of new housing units. Condo units were the most common house purchases in the capital region, single-detached houses were the most popular in areas outside NCR.
By region, NCR accounted for half or 50.4 percent of the residential real estate loans granted in the first quarter 2016, followed by Calabarzon at 28.4 percent, 7.6 percent in Central Luzon, 3.8 percent in Visayas, and 3.3 percent in Central Visayas.
Bangko Sentral required universal, commercial and thrift banks under circular 892 issued on Nov. 16, 2015 to submit bank quarterly report on residential real estate loans granted for the generation of the index.