The Unassuming Economist

The IMF’s report on the Philippines points out the macroprudential policies that have been implemented. The report says: “In light of the acceleration in credit growth in 2014 and risks of domestic asset price booms, the BSP [Central Bank of Philippines] conducted stress tests on banks’ real estate loan exposures and required corrective actions, enhanced monitoring of banks’ exposures to all types of real estate, and provided guidance on real estate mortgage loans, setting their maximum loan value at 60 percent of the appraised value. These measures have helped to restrain credit growth to the real estate sector. Single borrower limits (set at 25 percent of core capital) should be strictly enforced with the additional 25 percent allowance for exposures to PPPs allowed to lapse.”