NONperforming real estate loans remained at single-digit level in June this year, the Bangko Sentral ng Pilipinas (BSP) reported over the weekend.
In a recent speaking engagement, BSP Governor Benjamin E. Diokno said non-performing real estate loans hit 5.2 percent of the total portfolio in end-June 2021.
“The ratio of overall non-performing real estate loans to total real estate loans remained at single digit level, indicating that banks have remained prudent in their assessment of real estate loans,” Diokno said.
Banks’ real estate exposures continued to grow amid the pandemic. Real estate exposures of banks are largely composed of real estate loans at 85.4 percent of total real estate exposures.
In June 2021, real estate loans grew 6.1 percent year on year to P2.3 trillion.
“Loans of the Philippine banking system are broad-based, but real estate activities have consistently been the top recipient of bank loans,” Diokno said. “The BSP foresees that lending to the sector will remain a priority area for banks for the years ahead.”
The governor also said monetary policy stance has contributed to a general decline in lending rates across all loan product categories.
According to Diokno, the weighted average interest rate of housing loans dropped to 6.6 percent as of end-June 2021 from 8 percent in end- March 2020.
Similarly, the weighted average interest rate of loans to corporations fell to 4.9 percent as of end-June 2021 from 5.9 percent as of end-March 2020.