March 4, 2014 11:02 pm [
manilatimes.net ]
by Mayvelin U. Caraballo Reporter
The Bangko Sentral ng Pilipinas (BSP)
on Tuesday dismissed fears that an asset bubble was developing in the country,
saying
that increasing incomes and robust
remittances from overseas Filipino workers (OFWs) are fueling rising demand in
the property market.
Cyd Tuano-Amador, BSP assistant
governor for the monetary policy sub-sector, said that the Philippines has a
growing population that is enjoying increasing incomes, which is fueling the
demand for housing.
Speaking on the sidelines of the Asia
Finance Summit held at the Raffles and Fairmont Makati City on Tuesday,
Tuano-Amador said there has been a shift in the way people look at the property
sector, especially from OFWs, because a residential property is the largest
asset that any household can own.
“They [OFWs] they have to find
investment vehicles,” Tuano-Amador said. “What we saw was there was some
correction in the prices of residential properties in 2009 to 2010.”
According to the official, “There was
an increase in prices in residential and office space but it’s not as if it’s
getting ahead of itself.”
She assured that there are no signs
yet of an asset bubble forming in the country.
“We’re not seeing signs of that [asset
bubble] yet,” she said.
Among the signs of an asset bubble are
massive defaults on housing loan payments and a glut in property developments.
Earlier, the central bank said it was
monitoring and determining whether acceptable credit standards are being
maintained by banks with respect to their exposures to real estate in order to
prevent a property bubble from forming.
BSP data as of June 2013 showed that
banks’ real estate exposure remained manageable at P900.1 billion, up by 6.8
percent compared to their exposure in the preceding quarter.
Of the P900.1 billion exposure, 84.7
percent was in the form of real estate loans while the remaining 15.3 percent
were in the form of real estate investments.
In the third quarter of 2013,
residential real-estate loans surged by 23 percent, pushing the consumer
lending of universal, commercial and thrift banks to grow by about 17 percent
in the same period to P702 billion.
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