By Julito G.
Rada | Posted on May. 06, 2013 at 12:02am |
[
manilastandardtoday.com ]
The Bangko
Sentral ng Pilipinas may impose limits on the real estate exposure of banks as
part of the risk management for the sector, Governor Amando Tetangco Jr. said
over the weekend.
“Our
consideration here is a sound risk management or the implementation of sound
risk managements by banks. So what we are looking at now is to consider
prudential limits on real estate exposure relative to the capital of banks,”
Tetangco said.
“We are
considering this… this is the direction we are taking now,” he said. “[But] we
don’t know [yet] what is the appropriate limit… We have to study it first, that
is why we are waiting for the real estate report for 2012,” Tetangco said.
Tetangco said
there were no emerging signs yet of asset bubble in the property sector in the
Philippines.
“What we are
observing is that the financing terms are getting more and more attractive that
is why we’d like to closely monitor this. From financial stability standpoint,
bank loans are only one of the sources of funding being used for real estate
developments,” he said.
He said “some
developers are accessing the capital market, they’re issuing bonds and notes.
They are going to the equities. There are also funding coming from offshore.”
Tetangco said
even large high-end developers were moving down the market. “… So you see
developers concentrated in the high-end and now catering to low-cost and middle
segments,” he said.
Meanwhile,
Tetangco said the central bank would review the possibility of reducing further
the interest rate on special deposit accounts from the current 2 percent.
“We still
have to review that… we have to look at the flow of funds at the financial
markets,” Tetangco said, adding the Bangko Sentral had no plan to close down
the SDA facility.
“SDA
continues to be an effective monetary policy tool,” he said.
Funds parked
at the SDA facility reached P1.929 trillion as of March 8 this year because of
liquidity.
“Part of that
goes to SDA. Even the remittances or business process outsourcing receipts.
When these enter the country, it will be converted into pesos and part of those
will be invested in SDA by banks, or individuals through banks,” he said.
The Monetary
Board, the policy-making body of the central bank, in April reduced the
interest rates on SDA by 50 basis points to 2 percent from 2.5 percent across
all tenors on the benign inflation outlook.
The Bangko
Sentral said the lower rate aims to finetune its monetary policy instruments
and gain greater flexibility in conducting monetary operations as well as
ensure adequate liquidity for economic activity.
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