Philippine central bank allows lenders to make more real estate loans

[MANILA] The Philippine central bank on Thursday increased the lending limit on real estate loans, giving big banks more leeway to finance the property sector as the country gradually reopens its economy after coronavirus lockdowns.

The Monetary Board raised the real estate loan limit of universal and commercial banks to 25 per cent of lenders' total loans from 20 per cent, central bank Governor Benjamin Diokno told reporters.

The move would provide an additional 1.2 trillion pesos (S$33.8 billion) liquidity for real estate lending, Mr Diokno added. The relaxed rules were disclosed ahead of an announcement of key interest rates on Thursday afternoon.

Outstanding loans for real estate activities rose by a tenth to 1.719 trillion pesos in June from a year ago, central bank data showed. Real estate loans accounted for a fifth of total loans for economic activities.

The central bank expects credit activity to pick up in the coming months as economic activity recovers. The government on Tuesday relaxed strict lockdowns in the capital and nearby provinces, allowing more businesses to resume operations.

REUTERS

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