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Non-performing property loans rise

Thursday, December 25, 2008 [ ]

By Maricel E. Burgonio, Reporter

Bad loans to the real estate sector rose along with the increase in borrowings of, and bank investments in property firms.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said non-performing loans rose by 5.2 percent to P16 billion at end-September from the previous quarter’s P15.2 billion.

Consequently, the ratio of non-performing real estate loans to total real estate loans rose to 7.4 percent from previous quarter’s 7.3 percent. As a percentage of banks’ total loan portfolio, delinquent real estate loans were unchanged from last quarter’s 0.8 percent.

Real estate loans and investments of universal and commercial banks grew by single digits in the first nine months of the year, the BSP said.

It said the exposure of universal and commercial banks to the real estate sector increased to P223.9 billion at end-September from P213.1 billion at end-June and P192.3 billion in September last year.

Additional exposure for the quarter comes from real estate loans amounting to P7.7 billion and investments in securities issued by property companies at P3.2 billion.

Real estate loans rose to P215 billion from P207.3 billion in June and P186.3 billion in September last year.

The bulk of the loans were extended to the commercial sector consisting of the construction and development of real estate properties, which accounted for 71 percent while the remaining 29 percent was used for the acquisition, construction and/or improvement of residential units that is or would be occupied by individual borrowers.

In terms of investments in debt securities issued by and in equity securities of real estate companies, lenders had an exposure of P8.9 billion in September, up from June’s P5.7 billion and September last year’s P6.0 billion.

The ratio of combined real estate loans and investments to the property industry, to lenders’ total loan portfolio plus total debt and equity investments stood at 6.8 percent. This was slightly higher than last quarter’s and year ago’s 6.7 percent.


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