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Banks hike property sector exposure by 5%

Vol. XXII, No. 108-A [ BusinessWorld Online ]

Thursday, December 25, 2008 | MANILA, PHILIPPINES

Banks’ exposures to real estate continued to grow, indicating that the property sector is still expanding even amid less favorable economic conditions.

Data released yesterday by the Bangko Sentral ng Pilipinas (BSP) showed that exposures of universal and commercial banks to the real estate sector — mostly in the form of loans and investments — reached P223.9 billion in September, 5.1% higher compared to the previous quarter’s P213.1 billion.

The latest figures were also higher by about a fifth from last year’s P192.3 billion.

The central bank said the additional exposure for the quarter was due to the 3.7% growth in real estate loans, to P215 billion, as well as investments in stocks and bonds issued by property firms, which grew by more than half to almost P9 billion.

Loans for construction and commercial property development accounted for a little over 70%, or P152.7 billion, of total real estate loans. The rest, P62.3 billion, were for housing loans.

Despite the expansion in real estate loans, lending to the sector as a percentage of banks’ total lending businesses was up only slightly to 10.4% due to faster growth in other lending activities.


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