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Manila Bulletin devider Business devider Banking & Finance devider Philippine banks' property exposure inches up to 19.6% in Q2

Philippine banks' property exposure inches up to 19.6% in Q2

Published Sep 15, 2025 12:00 am  |  Updated Sep 13, 2025 02:28 pm

At A Glance

  • From a six-year low in the first quarter, the real estate exposure of Philippine banks and their trust units slightly inched up to 19.61 percent of the banking industry's total loan book as of end-June.
From a six-year low in the first quarter, the real estate exposure of Philippine banks and their trust units slightly inched up to 19.61 percent of the banking industry’s total loan book as of end-June.
While this was higher than the first quarter’s 19.41 percent, banks’ property exposure remained below the 19.92 percent recorded in the same quarter of 2024, according to the latest data from the Bangko Sentral ng Pilipinas (BSP).
During the second quarter, banks and trust units’ real estate loans (RELs) grew by 8.8 percent to ₱3.03 trillion from ₱2.79 trillion in the same period last year. Meanwhile, real estate investments (REIs) fell by 2.6 percent to ₱361.4 billion from ₱371.1 billion a year earlier.
As of June, residential RELs rose by 11.5 percent to ₱1.16 trillion from ₱1.04 trillion a year ago. Commercial RELs also increased by 7.3 percent to ₱1.87 trillion from ₱1.74 trillion in the same period of 2024.
REIs, which consist of debt and equity securities, registered declines. Debt securities slipped by 1.7 percent to ₱241.2 billion from ₱245.3 billion, while equity securities dropped 4.5 percent to ₱120.2 billion from ₱125.8 billion last year.
Meanwhile, bank proper RELs stood at ₱3.03 trillion, up 8.7 percent from ₱2.78 trillion in the same period of 2024. Banks’ REIs amounted to ₱94.8 billion, 5.3-percent lower than the ₱100.1 billion reported last year.
Global real estate services firm Colliers, in its August property market report, noted that Metro Manila’s office market sustained its growth momentum in the first half of 2025 after gains early in the year.
The performance was driven by “steady demand from traditional and outsourcing firms through expansions and new setups,” Colliers said.
It also reported that vacated office spaces continued to decline as non-Philippine offshore gaming operator (POGO) tenants—such as business process outsourcing (BPO) and corporate offices—opted to stay longer in their current locations.
Colliers said this indicates stronger tenant retention and improved market sentiment.
“To capture evolving demand, landlords are encouraged to offer flexible space options, invest in refurbishing aging office buildings to stay competitive, and explore asset repurposing,” Colliers said.
“Developers, in turn, are urged to tap into emerging provincial hubs where tenant interest continues to grow despite limited available supply,” it added.
It can be recalled that the BSP earlier relaxed its rules on banks’ real estate loan limits, raising the cap from 20 percent to 25 percent to encourage more lending for residential property acquisition and construction.
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