Business and Economy
Real estate loan standards tightened
Bangko Sentral ng Pilipinas (Central Bank of the Philippines). Wikipedia photo
MANILA — Banks tightened their lending standards for commercial estate loans in the second quarter.
A net tightening of overall credit standards for commercial real estate was shown in the results of the second quarter 2015 Senior Bank Loan Officers’ Survey.
This is following the stricter rules on bank’s real estate exposure imposed by the central bank.
The Bangko Sentral ng Pilipinas said that the tightened standards are attributed to “perceived stricter oversight of banks’ real estate exposure along with banks’ reduced tolerance for risk.”
It added that the stricter standards come with “wider loan margins, shorter loan maturities, and increased use of interest rate floors for commercial real estate loans.”
“A number of banks, however, indicated increased demand for the said type of loan on the back of clients’ improved economic outlook and banks’ more attractive financing terms,” the central bank added.
