Car Loans Rise as Philippine Auto Industry Grows

Car loans climbed in June as the local automotive industry continued posting sales growth amid the perceived economic downturn.

Data from the central bank showed that automobile loans (ALs) stood at P79.1 billion as of end-June, 3.3 percent higher than the loans extended for car purchases at the end of the first quarter.Automotive loans ratio to the banking industry’s total loan portfolio dipped to 3.4 percent in June from 3.3 percent in March.

The Bangko Sentral ng Pilipinas (BSP) did not report annual comparative data as it is applying a new package in financial reporting. Auto loans are now classified as car loans to individuals for consumption purposes against an earlier classification which combines car loans to individuals and corporate accounts.

BSP data showed that thrift banks dominated the car loan disbursements as they accounted for 58.1 percent of the auto loans in the second quarter. Universal and commercial banks cornered 40.4 percent of the loans, while non-banking financial institutions carried 1.5 percent of the car loans.

The central bank said soured car loans ratio against the total auto loans fell to 5.1 percent in the second quarter.

“The improvement in the ratio from the last quarter transpired as the 5.2 percent drop in non-performing ALs to P4.0 billion came with the growth of ALs,” the central bank said.

Non-performing car loans against the banking industry’s total non-performing loans portfolio stood at 3.0 percent from the first quarter’s 3.2 percent.

Data from the Chamber of Automotive Manufacturers of the Philippines showed that the local car industry sold 61,654 units as of end-June, a 13.6 percent rise from sales as of the same month in 2007. The domestic automotive industry hopes to sell 125,000 units this year.

GMANews.TV

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