Real estate loans stay resilient as developers tap emerging markets

The Philippine banking sector is demonstrating resilience in real estate financing, with strong growth in residential loans even as overall property exposure adjusts to reflect strategic shifts in market demand, according to latest data from the Bangko Sentral ng Pilipinas (BSP).

As of end-March 2025, real estate loans (REL) and investments (REI) accounted for 19.41 percent of the banking system’s total loan portfolio—slightly lower than last year’s 20.31 percent and the lowest since March 2019. Analysts say the shift signals a maturing approach to risk management while ensuring continued support for key growth sectors.

Despite the moderation in total exposure, the BSP data highlights robust growth in residential property lending. Residential REL rose by 10.8 percent year-on-year to P1.13 trillion, underscoring strong demand from end-users supported by favorable lending terms and aggressive ready-for-occupancy (RFO) promos from developers.

Commercial REL also increased by 7.7 percent to P1.83 trillion, reflecting steady business activity in the property sector. Meanwhile, banks’ real estate investment portfolios showed a selective shift, with debt securities up by 1.9 percent to P256 billion, even as equity securities dipped slightly—indicating a cautious but still engaged investor stance.

Industry watchers say the measured recalibration of bank portfolios is healthy and reflects broader trends in Philippine real estate. A recent residential market report shows growing take-up for condominium units in Metro Manila, especially those offered with flexible move-in and rent-to-own schemes. Developers have also started focusing on competitive locations outside the capital, aligning with end-user demand for space, accessibility, and value.

The BSP has likewise continued to provide supportive policies for the sector. The recent relaxation of real estate lending limits—raising the cap from 20 percent to 25 percent—aims to sustain credit flow to households, particularly those acquiring homes for long-term use.

With a strong and well-targeted lending approach, banks are helping drive a more balanced and resilient real estate market—one that supports both investor confidence and real demand from Filipino homebuyers.