Loans for housing, real estate up by 9% in first quarter

LOANS for housing and commercial real estate development rose 9 percent in the quarter through March 2010, reflecting the economy’s 7.3-percent expansion during the period, the central bank said over the weekend.

The banks’ exposure to the real estate sector reached P400.7 billion, up from P367.4 billion a year ago and 1.8 percent higher than the P393.6 billion registered in the fourth quarter last year.

Loans to build real estate property for commercial purposes represented P219.7 billion or 56.6 percent of the total, while loans to acquire, build or improve residential units accounted for P168.2 billion or 43.4 percent.

Residential real estate loans rose 4.9 percent, while commercial real estate loans grew 11.3 percent.

Despite the increase in real estate loans, banks were not worried about the possibility of asset price bubbles, insisting that demand for housing and office space would be sustained given the large housing backlog and the expansion of the business process outsourcing sector.

Ownership of dwellings rose 3 percent, while the real estate sector grew 10.9 percent on the back of higher sales of residential projects and higher income from business office space.

Non-performing real estate loans dipped 8.1 percent to P23.2 billion from P25.3 billion.

“Consequently, the ratio of non-performing real estate loans was the same as last quarter’s 6.0 percent, but … was better than the 7.1 percent ratio posted a year ago,” the Bangko Sentral said.

Residential real estate loans comprised 40.3 percent of the total consumer loans amounting to P417.2 billion, which was up by 8.1 percent from a year ago.

Meanwhile, automobile loans surged 22.1 percent to P99.8 billion from P81.8 billion a year ago, and was 5.5 percent higher than the fourth quarter’s P94.6 billion.

Credit card transactions rose 4 percent to P130.7 billion, though that was 4.4 percent down from the P136.6 billion registered in the fourth quarter last year.

Other consumer loans increased 5.9 percent to P39.2 billion, but that was down 3.3 percent from the fourth quarter last year.

The central bank defines other consumer loans as those loans granted to finance the purchase of household appliances, furniture and fixtures, or to pay taxes, hospital and school bills. –Roderick T. dela Cruz, Manila Standard Today