By Mary Grace Padin (The
Philippine Star) | Updated April 24, 2017 - 12:00am
The results of the BSP’s
Senior Bank Loan Officers’ Survey showed that credit standards for commercial
real estate loans registered a net tightening for the fifth consecutive quarter
using the diffusion index approach. File
MANILA, Philippines
- Banks continued to tighten their
credit standards for real estate loans to companies, while maintained those for
housing loans of individuals during the first quarter, the Bangko Sentral ng
Pilipinas (BSP) reported.
The results of the BSP’s
Senior Bank Loan Officers’ Survey showed that credit standards for commercial
real estate loans registered a net tightening for the fifth consecutive quarter
using the diffusion index approach.
“The tighter overall
credit standards for commercial real estate loans reflected respondent bank’s
wider loan margins, reduced credit line sizes, and increased use of interest
rate floors,” the BSP said in a statement.
Results of the survey
also indicated that some banks saw increased demand for real estate loan from
enterprises in the first quarter on the back of increased working capital and
accounts receivable financing needs, higher investment in plant and equipment
of borrowers, and clients’ improved economic outlook.
Some banks anticipate
this demand for commercial real estate loans to continue to increase over the
next quarter.
On the other hand,
results based on the diffusion index approach also showed that credit
requirements for housing loans of individuals remained unchanged during the
first three months.
“The unchanged credit
standards for housing loans was attributed by respondent banks largely to their
sustained tolerance for risk and steady profile of borrowers, as well as stable
economic outlook,” the BSP said.
For the second quarter,
credit standards for individual housing loans are expected to register a net
easing as banks anticipate an improvement in the profitability and liquidity in
their portfolio, an increase in their tolerance for risk, and less strict
financial system regulations.
Banks said they
experienced an increased demand for housing loans in the first quarter, and
expects this momentum to persist over the next three months.
Meanwhile, results of the
survey using the modal approach showed that credit standards both for
commercial and individual real estate loans were maintained during the first
quarter. Demand was also unchanged, and is seen to continue being at the same
level over the next quarter.
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