Banks’ exposure to real estate declined in the first quarter as lenders kept a more measured approach to credit allocation in the sector amid tighter financial conditions, according to the Bangko Sentral ng Pilipinas (BSP), as reported by Philstar Biz.
The ratio of banks’ real estate loans to total loan portfolio eased to 19% as of end-March, down from 19.8% in the previous quarter. The BSP attributed the decline to banks’ cautious lending policies and higher interest rates that dampened demand for property financing.
The central bank noted that the real estate sector remains under close monitoring, particularly for potential risks from a slowdown in the property market. The decline in exposure suggests banks are prioritizing asset quality amid an uncertain economic outlook.