{"id":18762,"date":"2024-05-15T03:06:54","date_gmt":"2024-05-15T03:06:54","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/phl-banks-exposure-to-the-real-estate-sector-eases-to-20\/"},"modified":"2024-05-15T03:06:54","modified_gmt":"2024-05-15T03:06:54","slug":"phl-banks-exposure-to-the-real-estate-sector-eases-to-20","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/phl-banks-exposure-to-the-real-estate-sector-eases-to-20\/","title":{"rendered":"PHL banks\u2019 exposure to the real estate sector eases to 20%"},"content":{"rendered":"
\n

THE EXPOSURE of Philippine banks<\/span> and trust entities to the property sector eased to 20.17% as of end-December last year, from 20.55% at end-September 2023, data from the Bangko Sentral ng Pilipinas (BSP) showed.<\/span><\/p>\n

Preliminary BSP data also showed this was lower than the 20.98% ratio at the end of December 2022.<\/p>\n

Investments and loans extended by Philippine banks to the real estate sector increased by 4.3% to P3.15 trillion as of end-December from P3.02 trillion as of end-December 2022.<\/span><\/p>\n

\u201cThis may have to do with the expanding base of total loans that mathematically led to a smaller share of real estate loans to total loans,\u201d Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.<\/p>\n

\u201cThe ratio also eased amid the need for banks to comply with limits on real estate loans, investments, and other related exposures, as a matter of prudence to address concentration risks on the industry,\u201d he added.<\/p>\n

Central bank data showed that real estate loans rose by an annual 5.8% to P2.74 trillion as of end-December from P2.59 trillion as of December 2022.<\/p>\n

Broken down, commercial real estate loans went up by an annual 5.5% to P1.73 trillion, while residential real estate loans increased by 6.7% to P1 trillion.<\/p>\n

Meanwhile, past due real estate loans jumped by 2.4% to P135.261 billion.<\/p>\n

This as past due commercial real estate loans rose by 4.4% to P39.987 billion, while past due residential real estate loans edged higher by 1.5% to P95.274 billion.<\/span><\/p>\n

Gross nonperforming real estate loans inched up by 0.5% year on year to P108.389 billion.<\/p>\n

This brought the gross nonperforming real estate loan ratio to 3.96% as of end-December from 4.17% as of end-2022.<\/span><\/p>\n

Meanwhile, real estate investments in debt and equity securities declined by 5.9% to P410.653 billion in the period ending December 2023.<\/p>\n

Mr. Ricafort also noted that higher borrowing costs may have reduced the demand for new real estate loans.<\/p>\n

\u201cSince real estate development and purchases by buyers require relatively larger amount of capital and <\/span>f<\/span>inancing, (it\u2019s more) sensitive to higher interest rates.\u201d<\/span><\/p>\n

From May 2022 to October 2023, the central bank raised rates by a cumulative 450 basis points (bps) to bring the benchmark rate to a 17-year high of 6.5%.<\/p>\n

The BSP monitors lenders\u2019 exposure to the real estate industry as part of its mandate to guide f<\/span>inancial stability.<\/p>\n

In 2020, the central bank raised the real estate loan limit of banks to 25% of their total loan portfolio from 20% previously to free up additional liquidity as part of its relief measure during the pandemic.<\/span><\/p>\n

Separate BSP data showed that housing prices rose at a slower pace in the fourth quarter of 2023. The Residential Real Estate Price Index rose by 6.5% in the fourth quarter, much slower than the 12.9% expansion in the third quarter and the 7.7% growth in the same period a year ago. \u2014 Luisa Maria Jacinta C. Jocson<\/b><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

THE EXPOSURE of Philippine banks and trust entities to the property sector eased to 20.17% as of end-December last year, from 20.55% at end-September 2023, data from the Bangko Sentral ng Pilipinas (BSP) showed. Preliminary BSP data also showed this was lower than the 20.98% ratio at the end of December 2022. Investments and loans [\u2026]<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[3911,14915,14644,13089,10076,13743,11354,6782,3365,214],"class_list":["post-18762","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-3911","tag-banks","tag-bworldonline","tag-eases","tag-estate","tag-exposure","tag-phl","tag-real","tag-sector","tag-the"],"yoast_head":"\nPHL banks\u2019 exposure to the real estate sector eases to 20% - Energy Buzz<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energybuzz.ph\/phl-banks-exposure-to-the-real-estate-sector-eases-to-20\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"PHL banks\u2019 exposure to the real estate sector eases to 20% - Energy Buzz\" \/>\n<meta property=\"og:description\" content=\"THE EXPOSURE of Philippine banks and trust entities to the property sector eased to 20.17% as of end-December last year, from 20.55% at end-September 2023, data from the Bangko Sentral ng Pilipinas (BSP) showed. 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