The Bangko Sentral ng Pilipinas may implement in 2013 tighter rules concerning real estate exposure of banks.
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This was according to BSP Deputy Governor Nestor Espenilla Jr., who said the BSP has required banks to submit reports on their total exposure to the real estate sector before the end of this year.?
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The data to be gathered from the said reports will be used by the BSP to determine if there is a need to tighten rules on real estate exposure of banks, he said.
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Under existing regulations of the BSP, banks must limit their ?real estate exposure? to a maximum 20 percent of their total loan portfolio. Also, ?real estate exposure? is defined as loans granted to developers of residential and commercial properties.?
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Espenilla said there are other forms of real estate exposure that is not covered by the existing definition. These include housing loans extended to individual borrowers, loans to entities engaged in socialized housing projects, and investments by banks in securities sold by real estate firms.?
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He said the BSP wants to know the extent banks are exposed in these other forms. In the reports, which banks should submit before the year?s end, all forms of exposure to the real estate sector must be disclosed.
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If the BSP finds the total exposure of banks to be excessive, Espenilla said the regulator shall implement necessary adjustments in the existing regulations. Such a move will be aimed at avoiding an asset price bubble in the property sector.?
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?Our objective right now is to have an accurate picture of the actual extent of real estate exposure that banks have. Once we get the accurate picture? we can redefine the formula or impose more regulations if necessary,? said Espenilla.
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?But again, I emphasize that at this point in time, we are not seeing a crisis in the property market,? he added. ? DVM, GMA News
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