Filipinos borrow more to buy home appliances

MANILA, Philippines – Filipinos are tapping more loans to purchase household appliances as well as furniture and fixtures or to pay taxes as well as hospital and educational bills as the country’s economic output zoomed to its fastest level in almost three years.

Data released by the Bangko Sentral ng Pilipinas (BSP) showed that other consumer loans granted by universal and commercial banks as well as thrift banks to individuals to finance other personal and household needs went up by 5.91 percent to P39.15 billion in the first quarter of the year from P36.97 billion in the same period last year.

Loans extended by thrift banks for the personal and household needs of consumers surged by 12.61 percent to P23.86 billion from January to March this year from P21.19 billion in the same period last year while that of universal and commercial banks declined by 3.1 percnt to P15.29 billion from P15.78 billion.

The country’s gross domestic product (GDP) surged by 7.3 percent in the first quarter of the year from 0.5 percent in the same quarter last year, surprising government as well a private sector economists and analysts.

The National Economic and Development Authority (NEDA) was expecting a GDP growth of between 2.9 percent and 3.9 percent in the first quarter in line with the government growth forecast of between 2.6 percent and 3.6 percent this year.

The increase resulted in an 8.1-percent rise in the consumer loans of the banking industry with P413.1 billion in the first three months of the year from a year-ago level of P385.8 billion.

Consumer loans accounted for 16.4 percent of the banking industry’s total loan portfolio that amounted to P2.55 trillion in the first quarter of the year from 15.2 percent of P2.54 trillion in the same quarter last year.

Universal and commercial banks controlled the lion’s share or 60 percent of the total commercial loan exposure of the banking system while thrift banks accounted for the remaining 40 percent.

Data showed that consumer loans of universal and commercial banks rose by 8.76 percent to P250.13 billion from P229.99 billion while their total loan portfolio declined by 0.58 percent to P2.23 trillion from P2.24 trillion. –Lawrence Agcaoili (The Philippine Star)