Financial institutions are pointing to a decline in loan demand for housing loans in the first quarter, reflecting consumers’ reduced appetite for housing investment.
The Monetary Board raised the real estate loan limit of big banks to 25 percent from 20 percent in August, releasing 1.2 trillion pesos in additional liquidity for lending to the sector to soften the impact of the pandemic.
Last week, S&P Global Ratings warned the significant real estate exposure of Philippine banks may drive asset-quality deterioration further amid the uncertainties brought about by the pandemic.
Latest data from the Bangko Sentral ng Pilipinas showed the exposure of banks in the volatile real estate sector increased to 19.9 percent in end 2019 and almost touched the 20 percent ceiling set by the regulator.
The steady rise in the industry’s real estate exposure could be traced to higher loans extended to the sector, as well as rising property prices.