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Private lenders cut housing loan rates to record low

[ manilastandardtoday.com ] June 13, 2011

Private banks have ignored the interest rate hike implemented by the Bangko Sentral this year, as they tried to outdo each other by offering the lowest home loan rate.

Philippine National Bank said it had trebled its bookings for home loans when it offered an industry low rate of 5.55 percent for a one-year repricing rate, beating the offers of other banks.

“The reaction of the market is good. It put us back in the awareness of the consumers, including developers,” said Elfren Antonio Sarte, senior vice president and head of consumer finance of PNB.

Bank of the Philippine Islands and thrift banking unit BPI Family Savings Bank, however, beat this rate this month, when it enticed its borrowers to a promotional rate of 5.50 percent for one-year home loans.

A foreign bank, Hongkong and Shanghai Banking Corp., started the trend when it brought down its one-year housing loan interest rate to 5.99 percent in October 2010.

Several months later, East West Bank beat this when it offered 5.88 percent for a one-year home loan, forcing HSBC to reduce its rate to 5.75 percent early this year.

Ron Logan, senior vice president and head of personal financial services of HSBC, said the public reception on the bank’s home loans had been positive.

PNB president Eugene Acevedo said the growth in home loans would enable the bank to post at least 40-percent growth in consumer loans this year. PNB accounts for only 2 percent of the consumer loan industry. “Our target is to have a 10-percent market share in the consumer loans within the next four to five years,” he said.

Sarte said PNB was steadily growing its consumer market. “When I joined PNB last year, I didn’t know that the problem is not only the product and the process. It is also our reputation in the market. Developers and car dealers didn’t want to talk to us anymore,” he said. Roderick T. dela Cruz
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