Banks tighten real estate lendingBanks have tightened credit standards on loans extended to real estate developers and housing loans for individuals, the Bangko Sentral ng Pilipinas (BSP) reported. The tighter overall credit standards for commercial real estate loans reflected respondent banks’ reduced tolerance for risk and perception of stricter financial system regulations. Results of the Second Quarter 2016 Senior Bank Loan Officers’ Survey (SLOS) showed a net tightening of overall credit standards for real estate loans during the quarter using the diffusion index (DI) approach. In terms of specific credit standards, respondent banks showed wider loan margins, reduced credit line sizes, stricter loan covenants, and increased use of interest rate floors. Credit rules for housing loans extended to individual borrowers, meanwhile, showed a slight tightening in the second quarter of 2016.

Source: Manila Times July 24, 2016 12:11 UTC