The figures are expected to receive a significant upward boost when the central bank calculates festive season and December 2011 data, a period historically associated with high uptake of credit products. Commercial banks slowed their extension of credit to individuals in 2009 and 2010, having become risk averse after the global recession. However, latest BoB figures show a notable resurgence in 2011. By November, individuals accounted for 54 percent of total loans owed to commercial banks and 81 percent of arrears at P698.7 million as at September.
The data also indicates that individuals continue to be net borrowers to the banking system as they account for only 19.8 percent of deposits held by commercial banks, but 54 percent of credit advanced. Economists have said by being net borrowers, individuals could suffer greatly in the event of external shocks such as the economic slowdown that is forecast to reach local shores this year.
