TOTAL residential real estate loans (RRELS) of the banking system reached P530.7 billion in the first semester, data from the Bangko Sentral ng Pilipinas (BSP) show.

Sustained household investments in residential properties, the growing number of real estate projects, and intensified promotional campaigns by banks, supported the 15.6 percent year-on-year growth in real estate purchases in the first six months of the year, according to the central bank’s Second Quarter 2017 Report on Economic and Financial Developments.

Although RRELs ratio to total loan portfolio saw a decrease to 7.2 percent from the previous year of 7.4 percent, BSP said this has slightly inched up from the previous quarter ratio of 6.6 percent.

Meanwhile, a lower non-performing RRELs was seen in the first semester at 2.9 percent from 3.2 percent a year ago. Non-performing loans are those that are classified as default, or close to being in default, for failure of the debtor to pay his debt as scheduled.

Overall, BSP said total resources of the banking system amounted to P14.6 trillion as of June 2017, or 13.2 percent expansion from the same period last year. Bank lending by universal and commercial banks rose by 19 percent during the period, of which 88.5 percent went to “production activities.” Gross non-performing loan ratio also improved to 1.9 percent versus 2.2 percent in the first six months of 2016.

Aside from real estate loans, motor vehicle loans (MVLs) accelerated at a much faster pace. For the period in review, such loans amounted to P408.8 billion or by 24.1 percent year-on-year.

“Consumers’ strong demand for passenger cars and commercial vehicles, the introduction of new and refreshed models, appropriate product mix, as well as flexible financing schemes from banks and other car financing firms helped sustain the rise in vehicle purchases,” said BSP.

The share of total MVLs to TLP increased to 5.6 percent from last year’s 5.4 percent. Non-performing loans for this segment also showed improvements from 4.8 percent down to 4.2 percent.