Banks should disclose deals in real estate sector - BSP

ABS-CBN - Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said the central bank will issue new rules that will require banks to disclose investments in the real estate sector, as he expressed concern over asset price pressures.

That data is not yet captured by bank loans even if the industry reports regularly to the BSP. Tetangco said, “it could be expensive to clean up after an asset price bubble” so that the BSP policy tack “leans against such price pressures.”

The BSP currently imposes a 20 percent cap (of total loan book) on bank lending to the real estate sector, and the new rules could be a way to check if banks are finding a way to skirt that limit through investments in equity and bonds of property companies.

BPI President Aurelio Montinola, meanwhile, said he sees no problem in the new rules. He said, however, he doesn't see just yet asset price pressures.

For latest update on real estate development and its RA 9646, the Real Estate Service Act of 2009, visit www.ra9646.com.