At A Glance
- Philippine banks’ exposure to real estate lending dropped to its lowest level in seven years in the fourth quarter of 2025, as domestic lenders gravitated toward other high-growth sectors while keeping real estate exposure in check.
Philippine banks’ exposure to real estate lending dropped to its lowest level in seven years in the fourth quarter of 2025, as domestic lenders gravitated toward other high-growth sectors while keeping real estate exposure in check.
According to the latest data from the Bangko Sentral ng Pilipinas (BSP), the ratio of real estate loans (REL) to the total loan portfolio of the banking system eased to 18.96 percent, the lowest share recorded since December 2018, when the ratio stood at 18.65 percent. This exposure level is lower than the 19.75 percent recorded in the same quarter of the previous year and the third quarter’s 19.54 percent.
During the fourth quarter of 2025, banks’ and trust units’ REL expanded by 6.6 percent to ₱3.15 trillion from ₱2.95 trillion a year ago. Quarter-on-quarter, REL grew by 1.7 percent from ₱3.1 trillion at the end of September.
Meanwhile, real estate investments (REI) rose by 1.7 percent to ₱359.8 billion from ₱353.8 billion a year ago. This also represents a 1.4-percent increase from the ₱354.7 billion reported in the third quarter.
By segment, residential REL increased by nine percent to ₱1.2 trillion as of December, up from ₱1.1 trillion a year ago. Commercial REL also saw growth, rising 5.2 percent to ₱1.95 trillion from ₱1.85 trillion in the fourth quarter of 2024.
REI, which consists of debt and equity securities, registered modest growth. Equity securities rose by 4.8 percent to ₱122.5 billion from ₱116.9 billion a year ago, while debt securities remained relatively flat at ₱237.3 billion from ₱236.9 billion.
Specifically, bank proper REL, excluding trust departments, stood at ₱3.15 trillion, up 6.6 percent year-on-year. Banks’ own REI reached ₱92.8 billion, an increase of 5.2 percent from the ₱88.2 billion reported in December 2024.
Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the seven-year low exposure to real estate lending signals maturity on the part of lenders, rather than “a loss of faith in property.”
“Banks are rotating toward growth areas while keeping real estate exposure in check,” Ravelas said, adding that maintaining controlled exposure could stabilize the banking system.
“If rates ease and absorption improves, REL growth can recover—but likely in a more selective, healthier way,” Ravelas explained. Key interest rates have so far settled at 4.25 percent, with the market anticipating tightening this April.
The article was originally published in Manila Bulletin and written by Derco Rosal.
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