Financial Adviser

Crisis dampens interest in home loans

The global financial meltdown has turned overseas Filipinos jittery in buying homes for their households, dampening prospects on local banks’ consumer lending.

The country’s two biggest thrift banks recorded contractions in overseas Filipinos’ housing loan applications in October—15 percent at BPI Family Savings Bank and 20 percent at Philippine Savings Bank (PSBank).

It was the first time in about five years that the banks had seen a decline in new loan application from overseas Filipinos. That sector used to provide lucrative business for banks, particularly remittances and consumer lending.

“The drop has been quite visible,” PSBank’s Pascual Garcia III said in an interview with the Philippine Daily Inquirer on Thursday.

“We won’t feel it immediately because there were (new loan) bookings done three or six months back,” BPI Family Bank vice president for retail mortgage division Jocelyn Sta. Ana said in a separate interview. “They have already made their down payment. But in terms of new loan applications, there is a drop.”

Consumer lending by banks in the Philippines grew by 20 percent last year, fueled by overseas Filipinos keen on buying homes. It was earlier reported that overseas Filipinos accounted for as much as 60 percent of new loan transactions with the country’s biggest thrift banks last year.

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