By Prinz P. Magtulis (The Philippine
Star) | Updated November 12, 2012 - 12:00am
MANILA, Philippines - The Bangko
Sentral ng Pilipinas (BSP) has identified “some pockets of concern” in asset
prices, but stressed these are nothing serious and that it remains vigilant to
ensure bubbles are not formed, an official said.
“We are seeing some pockets of concern
but these are very limited, very cyclical in nature, partly reflecting pent up
demand,” BSP Assistant Governor Ma. Cyd Tuaño Amador told reporters.
The statement was made as a quarterly
BSP survey released last week showed banks have become more careful extending
commercial real estate loans in the third quarter. These loans are used to
finance big-ticket projects such as malls and condominiums.
Data showed 23.1 percent of bank
respondents have “tightened somewhat” their requirements for getting commercial
real estate loans. This compared to zero during the previous four quarters.
Thirteen lenders have participated in the survey.
“This can be attributed to banks’
reduced tolerance for risk, less aggressive competition, deterioration in asset
portfolio of respondent banks and stricter financial system regulations,” a BSP
statement said.
Banks particularly made “stricter”
collateral requirements and loan covenants, the survey showed, even as loan
values were not increased and payment terms were not lengthened.
More rule tightening is expected in
the coming months, the survey said, and as such a “slight decline” in demand
for commercial real estate credit could be expected.
Standards for other type of bank
credits-such as auto loans and credit cards- were generally unchanged from the
second quarter, the survey said.
Amador said BSP is keeping an eye on
real estate lending, which if proven excessive could spur asset bubble
formation or when asset prices overshoot that they do not reflect real market
prices. Such is detrimental to the local economy.
“We remain watchful of developments
but we would have to wait for new reports to arrive and from there we will
determine if there is need to adjust real estate exposure rules,” she
explained.
In August, BSP unveiled a tighter
computation of banks’ real estate exposure. Among others, banks should now
include credit extended to low-cost housing projects and those channeled in
securities- both were originally exempted from calculations- in computing their
property exposure.
The 20-percent exposure cap had been
retained.
“When you include the exemptions,
banks have an exposure of between 15 to 16 percent. That does not include those
going to financial markets. We would have to see the reports to see a clearer
picture,” Amador explained.
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