BSP Releases Results of the RREPI Index for the Philippines Using Information from Banks' Housing Loan Applications

Date Published 6/14/2016
Author BSP
Theme Housing Finance and the Economy
Country Philippines

June 14, 2016

The Bangko Sentral ng Pilipinas (BSP) released today residential real estate price indices (RREPI) which could serve as a measure in assessing the trends in housing prices. Under BSP Circular No. 892 dated 16 November 2015, the BSP requires all universal/commercial banks (UBs/KBs) and thrift banks (TBs) in the Philippines to submit bank quarterly report on Residential Real Estate Loans (RRELs) granted for the generation of RREPI. Out of the 109 banks covered, 93 banks or 85.3 percent (consisting of 40 U/KBs and 53 TBs) submitted their reports to the BSP during the first quarter of 2016.

The construction of RREPI based on banks’ approved housing loan applications is a first in the Philippines and is expected to provide a valuable tool in assessing the real estate and credit market conditions in the country. 

RREPI Methodology

The RREPI measures the average changes in prices of different types of housing units over a period of time across different geographical regions where the growth rate of the index measures house inflation.  The RREPI is computed as weighted chain-linked index based on the average appraised value per square meter weighted by the share of floor area of housing units.  In addition to the overall RREPI, sub-indices were constructed for the different types of housing units (single, duplex, apartments and residential units). The generation of RREPI by different types of housing units is relevant due to their often different price evolutions.  These indices cover areas in the National Capital Region (NCR) and areas outside the NCR (AONCR).

Highlights of the Results

  • RREPI increased by 9.2 percent in Q1 2016 from its year-ago level. Real property prices in NCR and AONCR increased by 9.7 percent and 9.4 percent, respectively (Table 1).
    • Real property price movements in NCR and AONCR relatively follow the same pattern from Q1 2015 to Q3 2015 with growth rates in AONCR at the lowest.
    • Starting Q3 2015, year-on-year growth of real property prices in AONCR increased at a faster rate due to higher growth rates in prices of townhouses and condominium units. 
  • Condominium units posted the highest year-on-year growth in prices at 12.9 percent followed by townhouses at 8.5 percent; 
  • About 7 out of 10 residential real estate loans granted were for the purchase of new housing units;
  • Condominium units were the most common house purchases in NCR while in AONCR, single detached houses were the most popular; and
  • By region, NCR accounted for half (50.4 percent) of the residential real estate loans granted in Q1 2016, followed by Calabarzon (28.4 percent), Central Luzon (7.6 percent), Western Visayas (3.8 percent), and Central Visayas (3.3 percent).

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