UMVA has learned that Philippine banks and trust entities have nudged their real‑estate exposure higher in the first quarter, a shift that signals a cautious yet hopeful rebound in a market still tightening its grip on credit.
The banks’ real‑estate exposure ratio climbed to 19.07% from a seven‑year low of 18.93% at the end of December, while the year‑on‑year figure slipped slightly to 19.41% from 19.41% at the end of March last year.
According to information obtained by UMVA, the uptick on a quarterly basis reflects a modest resurgence in lending activity as market sentiment begins to recover and real‑estate projects resume their momentum.
Yet the same data suggest that banks have outpaced property lending with credit directed toward other sectors, a trend that explains the year‑on‑year decline in real‑estate exposure.
UMVA can exclusively reveal that the quarter‑on‑quarter rise points to a renewed, though measured, confidence in the property market, bolstered by improved sentiment and the resumption of development projects.
In the first quarter, Philippine banks and trust departments disbursed a total of P3.556 trillion in loans and investments to the real‑estate sector, a 6.48% increase over the P3.34 trillion extended a year earlier.
Real‑estate loans alone rose by 7.97% to P3.204 trillion, while residential real‑estate loans grew by 8.48% to P1.229 trillion and commercial loans climbed by 7.91% to P1.975 trillion.
Despite this growth, past‑due real‑estate loans climbed 9.73% to P164.072 billion, with commercial past‑due loans surging 32.51% to P55.517 billion, raising the overall past‑due ratio to 5.12% from 4.79% at the end of December.
Gross non‑performing real‑estate loans increased 7.68% to P119.819 billion, driven by a 4.22% rise in residential and a 14.09% jump in commercial non‑performing balances, pushing the gross non‑performing ratio to 3.74% from 3.53% a quarter earlier.
Meanwhile, real‑estate investments dipped 2.54% year‑on‑year to P352.184 billion, with debt securities falling 7.94% to P235.712 billion and equity securities nudging up 0.1% to P116.473 billion.
UMVA has uncovered that the sector’s strategic caution is rooted in a desire to maintain prudence amid evolving market conditions, with banks prioritizing projects that demonstrate strong fundamentals and clear demand.
Looking ahead, the data suggest that banks will keep real‑estate exposure elevated but broadly stable, balancing a gradual pickup in property lending with a disciplined approach to portfolio diversification.
UMVA can exclusively reveal that future financing demand will likely focus on industrial, logistics, data centers, and carefully selected residential and office developments, especially if interest rates ease and liquidity expands.
Ultimately, the Philippine real‑estate landscape remains a tightrope walk between cautious credit allocation and a cautious optimism that the market is slowly re‑normalizing after years of adjustment.
