MANILA, Philippines – Lending to the
real estate sector is expected to continue to grow despite the tighter rules
imposed by the Bangko Sentral ng Pilipinas (BSP) in measuring the exposure of
banks to the sector, officials of a consultancy firm said.
Karlo Pobre, research analyst at
Collier’s International said in an interview with reporters that a slowdown in
real estate loans is not likely even as the BSP recently issued rules which
expanded the definition of real estate exposure of banks to include not just
loans for construction and development but also funds extended to individuals
for the purchase of houses.
The expanded definition also covers
investments in equities and securities with proceeds to be used to finance real
estate activities.
Pobre noted that loans are seen to
continue to rise amid a favorable economic environment.
“It (loans) will increase.…On a
quarter-to-quarter to basis, it grew by (an average of) about 3.5 percent since
first quarter of 2010,” he said.
On the other hand, non-performing real
estate loans, have decreased to five percent from six percent in the first
quarter of last year.
“We see that trend to continue because
it has already established that downward trend since last year. Everything is
on the rosy side right now,” Pobre said.
He said they welcome the move of the
BSP because it shows that the central bank is taking a proactive approach in
monitoring the exposure of banks to the real estate sector given the number of
residential condominium units being put up.
“I guess, people are just overwhelmed
and even BSP because, five to 10 years ago, we did not see this number of condo
units being built... Everyone is just taking safety measures,” he said.
He added that there is no possibility
of an occurrence of a property bubble right now.
Julius Guevara, associate director for
advisory services at Colliers International said he also sees the recent
development as a positive move by the BSP.
“I think the BSP has been very
proactive in trying to just monitor how exposed the developers are. I guess it
is because of the fear of the repeat of the Asian crisis back in the 1990s. I
think it’s a good sign that the central bank is watching over this...so this is
a bit of good news,” he said.
According to BSP data, banks’ property
exposure was at 14.52 percent ending 2011.
The BSP said that while the figure is
below the 20-percent cap, it would continue to monitor developments in real
estate lending.
Meanwhile, Colliers International said
in its Philippine Real Estate Market report that total office stock is
projected to reach 7 million square meters by 2014, over 20 percent higher than
the previous year as strong demand from offshore and out sourcing sectors ramp
up construction.
For the residential sector, over
46,000 units of high-rise condominiums were tracked last year and about 5,500
units are seen to be completed annually to leading to a 30 percent growth in
total stock by 2014.
“Take-up remains consistently strong
despite the substantial number of supply in the pipeline,” Colliers said.
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