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Keisha Ta-Asan - The Philippine Star
March 6, 2025 | 12:00am
Data from the Bangko Sentral ng Pilipinas (BSP) showed that banks’ real estate exposure went up from 19.6 percent in end-September last year. It marked the highest level in two months or since the 19.9 percent as of end-June 2024.
Michael Varcas
MANILA, Philippines — The exposure of Philippine banks and trust entities to the volatile property segment inched up to 19.8 percent of total loans in end-December 2024 amid the sustained expansion of property-related lending despite economic uncertainties.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that banks’ real estate exposure went up from 19.6 percent in end-September last year. It marked the highest level in two months or since the 19.9 percent as of end-June 2024.
Investments and loans extended by the banking industry to the property sector stood at P3.31 trillion in end-2024, 5.1 percent higher than the P3.15 trillion seen a year ago.
Lending rose by 7.7 percent to P2.95 trillion in 2024 from P2.74 trillion in 2023. Commercial real estate loans rose by 6.9 percent to P1.85 trillion, while residential real estate loans grew by 10 percent to P1.1 trillion.
Past due real estate loans inched up by four percent to P140.65 billion. This came after past due commercial real estate loans edged higher by 2.3 percent to P40.92 billion, while past due residential real estate loans increased by 4.7 percent to P99.73 billion.
The gross non-performing loans (NPLs) of banks from the real estate sector stood at P108.81 billion as of end-December last year, 0.4 percent higher than the P108.39 billion in the comparable year-ago period.
Despite the increase in NPLs, the gross non-performing loan real estate ratio went down to 3.68 percent in end-2024 from 3.96 percent a year ago.
Meanwhile, real estate investments in debt and equity securities fell by 13.8 percent to P353.81 billion from P410.65 billion the previous year.
To ensure that banks’ exposure to the property sector remains manageable, the BSP continues to maintain prudential measures, including the real estate limit.
These measures also include the heightened surveillance of banks’ real estate and project finance exposures, and the real estate stress test thresholds for universal and commercial banks as well as thrift banks.
At the height of the global health crisis, the BSP raised the real estate loan limit of big banks to 25 percent from 20 percent in August 2020 to free up P1.2 trillion in additional liquidity for lending amid the uncertainties brought about by the pandemic.
BSP data showed that the Residential Real Estate Price Index slipped by 2.3 percent to 163.9 in the third quarter from 167.7 in the same quarter last year. This was the first time the index contracted since the 9.4 percent decline in the second quarter of 2021.
