Have Real Estate and Construction Loans Reached a Permanently High Plateau in December 2016?

Have Real Estate and Construction Loans as a percentage of the Total Loan Portfolio (TLP) in the Philippine Banking System reached a permanently high plateau?

It would appear so.  Sometime in 2011, these loans have rocketed past their historical range of 12.6% to 16.6% of TLP and have stayed there ever since.  As of December 2016, these loans have shown no sign of coming back down to their historical ranges.  Although that ratio peaked at 20.55% as of September 2013, the ratio remains substantially elevated at 19.83% as of December 2016.

Investment in Construction as a percentage of GDP also remains elevated and, in fact, is at an all time high. This ratio logged 12.22% as of 2016, the highest it has been in twenty-six years.



Philippine Real Estate and Construction Loans Are Out of Whack As of December 2015!

Philippine Real Estate and Construction Loans Are Even More Out of Whack As of September 2015!


Has the Philippine Real Estate Bubble Already Burst?

Is There a Real Estate Bubble in the Philippines?


Are Philippine Real Estate Loans Out of Whack?

Philippine Real Estate and Construction Loans Are Out of Whack As of December 2015!

It sure looks that way, judging from this chart:

It looks like Real Estate and Construction Loans as a percentage of Total Loan Portfolio (TLP) rocketed past its historical range of 12.6% to 16.6% of TLP sometime in 2011.  That ratio peaked at 20.55% as of September 2013 but has bottomed out at 18.61% of TLP as of December 2014. In 2015, this ratio has climbed back up to 19.59% as of December 2015.


Now, are we up to the levels of the previous real estate boom? (as in mid 1990s to 1997?) Honestly, we don't know.  BSP data only goes as far back as 1999 when the previous real estate bubble had already burst and the financial system was most likely deleveraging as evidenced in this chart.

Philippine Real Estate and Construction Loans Are Even More Out of Whack As of September 2015!


Has the Philippine Real Estate Bubble Already Burst?

Is There a Real Estate Bubble in the Philippines?


Are Philippine Real Estate Loans Out of Whack?

Philippine Real Estate and Construction Loans Are Even More Out of Whack As of September 2015!

It sure looks that way, judging from this chart:

It looks like Real Estate and Construction Loans as a percentage of Total Loan Portfolio (TLP) rocketed past its historical range of 12.6% to 16.6% of TLP sometime in 2011.  That ratio peaked at 20.55% as of September 2013 but has bottomed out at 18.61% of TLP as of December 2014. In the last nine months of the year, this ratio has climbed back up to 19.96% as of September 2015.

Now, are we up to the levels of the previous real estate boom? (as in mid 1990s to 1997?) Honestly, we don't know.  BSP data only goes as far back as 1999 when the previous real estate bubble had already burst and the financial system was most likely deleveraging as evidenced in this chart.

Construction Gross Value as a Percentage of GDP Has Is at a 25 Year High! - Updated as of 3rd Qtr. 2015

Has the Philippine Real Estate Bubble Already Burst?

Is There a Real Estate Bubble in the Philippines?

Are Philippine Real Estate Loans Out of Whack?

Are Philippine Real Estate Loans Out of Whack? - Updated as of December 2014

It sure looks that way, judging from this chart:

It looks like Real Estate and Construction Loans as a percentage of Total Loan Portfolio (TLP) rocketed past its historical range of 12.6% to 16.6% of TLP sometime in 2011.  That ratio peaked at 20.55% as of September 2013 but has leveled off to 18.61% of TLP as of December 2014.

Now, are we up to the levels of the previous real estate boom (as in mid 1990s to 1997)?  We don't know.  BSP data only goes as far back as 1999 when the previous real estate bubble had already burst.

Related Blog Posts:

Has the Philippine Real Estate Bubble Already Burst?

Is There a Real Estate Bubble in the Philippines?

Are Philippine Real Estate Loans Out of Whack?

The Philippine Consumer Has Not Peaked - Yet

Quite a few previous blog posts have detailed how the Philippine Real Estate Market may have already peaked in terms of sales volume and loans to the residential real estate sector.  The Philippine Real Estate Market has yet to peak in terms of price, although some of our ASEAN neighbors have already showed signs of plateauing to declining prices for residential real estate, notably including Singapore and Malaysia.

The two charts below indicate a slowdown in terms of loan growth in the real estate sector.

Since home prices have still continued their relentless climb, this  has not yet translated to a sharp uptick in Non-Performing Loans (NPLs) in the sector.

However, there was a slight uptick in NPLs from 3.15% of residential real estate loans in 2013 to 3.34% as of March 2014.

Negative Real Interest Rates

The persistence of negative real interest rates in the Philippines has led, unsurprisingly, to a sharp drop in Gross Domestic Savings Rate as a percentage of GDP since 2010.

Uptick in Consumer Loans

With negative real interest rates, it makes sense for consumers to buy tangible goods, such as real estate and cars, as a store of value.  Correspondingly, there was a sharp uptick in total consumer loans both as a percentage of GDP and as a percentage of the Total Loan Portfolio.

The uptick seems to have leveled off since 2012. Most of the increase, it seems, can be attributed to residential real estate loans and auto loans.  Again, the leveling off has not yet translated to any notable increase in consumer loan NPLs - yet.

Singapore, Malaysia, and Thailand Post Flat to Declining Housing Prices, Can the Philippines and Indonesia be Not Far Behind?

Singapore


Singapore's home prices slid for a third straight quarter, which, according to Bloomberg, is the longest losing streak in five years.  Home prices are still  86% above their year end 2004 levels. As can be seen from the chart below, Singapore's home prices have outstripped inflation by a wide margin.

Malaysia

Neighboring Malaysia's House Price Index actually topped out at 141.25% in the second quarter of 2012 and has posted a 3.37% decline since then to 136.48% as of the fourth quarter of 2013.  Home prices are just 36.48% above their year end 2004 levels.  Malaysian home prices tracked inflation for some time between 2004 and late 2009.  However, beginning in 2010, house prices outstripped inflation and have never looked back.

Thailand


In Thailand, which has been experiencing political turmoil for some time, home prices have remained essentially flat since the end of 2004. Home Prices ended 2013 with the index at 100.54%, just 054% higher than the end of 2004, but showing a substantial recovery since the recent low of 74.08% posted in the third quarter of 2009. Thailand, along with Indonesia, is one of the few ASEAN countries whose home prices have significantly lagged inflation, particularly since mid 2006.

Indonesia

Meanwhile in Indonesia, home prices have showed no signs of slowing down their upward trajectory.  In fact, prices seem to have gone parabolic, climbing 4.63% in the last quarter of 2013, from a base of 121.49% as of the third quarter of 2013 to 127.11% as of year end 2013.  Since 2006, home prices have risen 36.48%.  Indonesian home prices, like in Thailand, have lagged inflation since 2007.

Philippines

Philippine house price index stands at 196.65% at year end 2013, 96.65% above their year-end 2004 levels and have consistently outstripped inflation by a wide margin. Philippine home prices have posted the largest 10 year gains among all the countries considered in this blog post.  Like Indonesia, home prices have so far no signs of slowing down their upward trajectory for the foreseeable future.   The question is, is this momentum sustainable?  Or will the Philippines and Indonesia follow its ASEAN neighbors, Singapore, Malaysia, and Thailand, in exhibiting plateauing or declining house prices?  That remains to be seen.

Are Philippine Real Estate Loans Out of Whack?

It sure looks that way, judging from this chart:

It looks like Real Estate and Construction Loans as a percentage of Total Loan Portfolio (TLP) rocketed past its historical range of 12.6% to 16.6% of TLP sometime in 2011.  That ratio now stands at 20.4% of TLP as of December 2013.

Now, are we up to the levels of the previous real estate boom (as in mid 1990s to 1997)?  We don't know.  BSP data only goes as far back as 1999 when the previous real estate bubble had already burst.

Related Blog Posts:

Has the Philippine Real Estate Bubble Already Burst?

If There is a Real Estate Bubble in the Philippines, How Quickly Can It Burst?

Is There a Real Estate Bubble in the Philippines - June 2012?

Is There a Real Estate Bubble in the Philippines - Part II?

Is There a Real Estate Bubble in the Philippines?

How Leveraged is the Philippine Economy Relative to Other Global Economies?

Crossposted from my other blog: "The System is Broken"


Today is a doozy.  Spain is imploding and has followed Italy in imposing a short selling ban.  Six countries out of seventeen countries in the Eurozone are already in recession.  Greece and Ireland are in a depression. The US is at or is nearing a recession.  China, the world's second largest economy, is slowing.  So is India.

It's been obvious for some time that large swaths of Europe are in a sovereign debt crisis.  First, Iceland, then Ireland, then Greece and Portugal, and now Spain.  Italy soon to follow.  Quite a bit of blame for the crisis has been placed on the creation of the Euro currency, which allowed the monetary but not fiscal and economic union of the Eurozone countries, resulting in economic imbalances between those countries and the rest of the world.  Quite a bit of blame has also been placed on the financial leverage of those economies.  Greece, which recently had the largest debt restructuring of a sovereign nation and whose debtholders experienced a 75% haircut, will, if all goes well, still have a debt to GDP ratio of 120% by 2020!

So all this brings to mind the question: How leveraged is the Philippine economy relative to other global economies?  Are we the next Greece or Spain.  Based on the latest available data, we are at or below the global average.

With a Public Debt to GDP Ratio of 48.89% as of 2009, we are slightly above the global average of 47.90%.

Global Economies
Public Debt
As % of GDP
Year 2009
	Public Debt
Country	(% of GDP)
Liberia	224.13
Japan	217.60
Guinea-Bissau	163.31
Lebanon	147.97
Congo, Dem. Rep. of	138.26
Jamaica	137.44
Eritrea	134.97
Seychelles	127.34
Grenada	122.30
Antigua and Barbuda	118.26
Italy	115.77
Greece	115.16
Singapore	109.98
Barbados	105.36
Iceland	99.87
Belgium	96.80
Dominica	85.29
Sri Lanka	85.27
United States	84.26
Belize	81.42
Nicaragua	81.28
Sudan	80.60
Hungary	78.26
France	78.07
India	77.69
Israel	77.57
Portugal	76.30
Egypt	76.18
Bhutan	74.74
Germany	73.51
Cape Verde	70.76
Brazil	68.90
Malta	68.66
United Kingdom	68.49
Austria	67.11
Ghana	66.48
Sao Tome and Principe	65.78
Ireland	65.53
Cote d'Ivoire	65.01
Netherlands	61.77
Lao People's Democratic Republic	61.64
Jordan	61.39
Uruguay	60.65
Guyana	60.53
Albania	59.51
Argentina	59.02
Gambia, The	58.29
Congo, Republic of	57.59
Pakistan	57.29
Comoros	56.93
Cyprus	56.22
Malaysia	55.38
Togo	55.22
Cameroon	54.06
Fiji	53.50
Spain	53.10
Burundi	52.28
Yemen, Republic of	51.04
Poland	50.92
Mauritius	49.28
Kenya	49.17
Vietnam	49.04
Philippines	48.89
El Salvador	48.55
Morocco	47.71
Malawi	45.51
Turkey	45.50
Lesotho	45.35
Mexico	44.94
Thailand	44.22
Finland	43.90
Bangladesh	43.48
Tunisia	42.78
Tanzania	42.76
Sweden	41.63
Denmark	41.45
Bahamas, The	41.26
Armenia	40.63
Bolivia	40.54
Panama	39.87
Djibouti	39.53
Nepal	39.39
Switzerland	39.02
Angola	38.28
Tonga	38.25
Georgia	37.38
Qatar	36.70
Venezuela	36.38
Trinidad and Tobago	35.45
Croatia	35.41
Bosnia and Herzegovina	35.37
Czech Republic	35.34
Colombia	35.19
Ukraine	34.64
Madagascar	33.74
Latvia	32.83
Korea, Republic of	32.56
Senegal	31.96
Chad	31.41
South Africa	30.84
Romania	29.91
Lithuania	29.46
Slovenia	29.38
Mozambique	29.31
Cambodia	28.75
Indonesia	28.60
Dominican Republic	28.44
Solomon Islands	28.28
Costa Rica	28.02
Burkina Faso	27.86
Zambia	27.67
Moldova	27.56
Benin	27.52
Peru	27.38
Syrian Arab Republic	27.32
United Arab Emirates	27.12
Central African Republic	26.90
Bahrain	26.58
New Zealand	26.16
Gabon	26.07
Belarus	25.15
Haiti	24.77
Mali	23.93
Honduras	23.68
Guatemala	22.96
Uganda	22.22
Iran, Islamic Republic of	21.58
Macedonia, former Yugoslav Republic of	20.82
Suriname	20.35
China, People's Republic of	18.59
Paraguay	18.04
Australia	17.63
Luxembourg	16.46
Bulgaria	16.06
Saudi Arabia	15.97
Niger	15.78
Namibia	15.74
Nigeria	15.49
Botswana	14.96
Ecuador	14.67
Swaziland	14.66
Kuwait	14.33
Azerbaijan	12.11
Kazakhstan	10.93
Russian Federation	10.88
Hong Kong SAR	10.22
Oman	7.75
Estonia	7.15
Chile	6.21
Maldives	0.00
Montenegro	0.00
Vanuatu	0.00
Mauritania	0.00
Serbia	0.00
Samoa	0.00
Papua New Guinea	0.00
Brunei Darussalam	0.00
Mongolia	0.00
Kosovo	0.00
Sierra Leone	0.00
Afghanistan, Islamic Rep. of	0.00
Global Average	47.90

Source: www.imf.org


With Private Debt to GDP Ratio of 48.70% as of 2009, we are way below the global average of 72.18%.

Global Economies
Private Debt
As % of GDP
Year 2009
	Private Debt
Country	(% of GDP)
Japan	327.80
Cyprus	302.90
United States	234.90
United Kingdom	229.20
Spain	229.10
Netherlands	224.10
Ireland	223.80
Denmark	221.90
Portugal	195.10
Switzerland	193.10
Luxembourg	189.80
South Africa	184.20
Iceland	182.80
Hong Kong SAR	167.80
Lebanon	163.10
Malta	157.40
New Zealand	154.20
China, People's Republic of	145.10
Liberia	144.30
Sweden	144.10
Australia	143.70
Italy	141.60
Austria	140.90
Fiji	139.60
Malaysia	137.40
Thailand	137.00
Barbados	136.30
Germany	133.10
France	128.80
Vietnam	123.00
Belgium	118.80
Greece	115.60
Eritrea	113.10
Korea, Republic of	109.40
Mauritius	106.80
Estonia	105.40
Jordan	104.60
Bahamas, The	102.70
Morocco	100.80
Antigua and Barbuda	98.00
Finland	98.00
United Arab Emirates	97.50
Singapore	97.20
Brazil	95.80
Latvia	94.30
Chile	93.50
Slovenia	93.40
Ukraine	88.60
Grenada	87.40
Kuwait	86.80
Maldives	86.50
Israel	85.90
Bahrain	84.60
Panama	83.80
Hungary	81.40
Cape Verde	78.10
Croatia	76.40
Qatar	76.20
Montenegro	76.20
Egypt	75.10
Belize	73.00
India	70.40
Lithuania	70.00
Bulgaria	69.60
Nepal	69.10
Tunisia	68.30
Albania	68.00
Nicaragua	66.70
Turkey	63.00
Vanuatu	61.60
Colombia	61.50
Poland	61.40
Czech Republic	60.50
Bangladesh	60.40
Jamaica	57.90
Honduras	54.70
Costa Rica	54.60
Kazakhstan	54.60
Bosnia and Herzegovina	52.90
Mauritania	52.90
Romania	52.70
Bolivia	49.50
Guyana	49.10
Dominica	48.70
Philippines	48.70
Pakistan	48.40
Serbia	48.00
Samoa	46.50
Namibia	46.00
El Salvador	45.40
Seychelles	44.30
Mexico	43.70
Syrian Arab Republic	43.60
Macedonia, former Yugoslav Republic of	43.50
Tonga	43.20
Kenya	43.10
Moldova	41.40
Oman	41.30
Dominican Republic	40.60
Sri Lanka	39.60
Guatemala	39.20
Papua New Guinea	39.00
Iran, Islamic Republic of	37.20
Indonesia	37.00
Nigeria	36.90
Solomon Islands	35.10
Belarus	34.10
Russian Federation	33.70
Georgia	32.90
Djibouti	32.30
Trinidad and Tobago	32.30
Brunei Darussalam	32.20
Malawi	32.00
Bhutan	30.90
Paraguay	30.20
Mongolia	29.60
Angola	29.20
Uruguay	28.80
Ghana	28.70
Gambia, The	28.60
Argentina	28.00
Togo	27.30
Senegal	26.60
Suriname	26.20
Venezuela	25.90
Sao Tome and Principe	25.40
Ecuador	24.40
Haiti	23.60
Burundi	23.40
Cote d'Ivoire	23.00
Mozambique	22.60
Azerbaijan	22.50
Lao People's Democratic Republic	20.80
Comoros	20.50
Yemen, Republic of	20.30
Sudan	20.00
Armenia	20.00
Benin	19.30
Cambodia	19.10
Peru	18.90
Zambia	18.50
Tanzania	18.10
Central African Republic	15.30
Burkina Faso	14.80
Kosovo	14.10
Niger	12.50
Madagascar	11.80
Uganda	11.80
Sierra Leone	10.90
Mali	10.70
Swaziland	9.10
Cameroon	8.30
Chad	8.00
Gabon	7.60
Congo, Dem. Rep. of	7.30
Guinea-Bissau	4.90
Afghanistan, Islamic Rep. of	3.40
Saudi Arabia	0.60
Botswana	-1.00
Lesotho	-14.70
Congo, Republic of	-15.90
Global Average	72.18
Source: www.worldbank.org, www.imf.org

In terms of our Total Debt to GDP Ratio, the Philippines has a Total Debt to GDP Ratio of 97.59% as of 2009, far below the global average of 120.07%.

Global Economies
Public Debt, Private Debt, and Total Debt
As % of GDP
Year 2009
	Public Debt	Private Debt	Total Debt
Country	(% of GDP)	(% of GDP)	(% of GDP)
Japan	217.60	327.80	545.40
Liberia	224.13	144.30	368.43
Cyprus	56.22	302.90	359.12
United States	84.26	234.90	319.16
Lebanon	147.97	163.10	311.07
United Kingdom	68.49	229.20	297.69
Ireland	65.53	223.80	289.33
Netherlands	61.77	224.10	285.87
Iceland	99.87	182.80	282.67
Spain	53.10	229.10	282.20
Portugal	76.30	195.10	271.40
Denmark	41.45	221.90	263.35
Italy	115.77	141.60	257.37
Eritrea	134.97	113.10	248.07
Barbados	105.36	136.30	241.66
Switzerland	39.02	193.10	232.12
Greece	115.16	115.60	230.76
Malta	68.66	157.40	226.06
Antigua and Barbuda	118.26	98.00	216.26
Belgium	96.80	118.80	215.60
South Africa	30.84	184.20	215.04
Grenada	122.30	87.40	209.70
Austria	67.11	140.90	208.01
Singapore	109.98	97.20	207.18
France	78.07	128.80	206.87
Germany	73.51	133.10	206.61
Luxembourg	16.46	189.80	206.26
Jamaica	137.44	57.90	195.34
Fiji	53.50	139.60	193.10
Malaysia	55.38	137.40	192.78
Sweden	41.63	144.10	185.73
Thailand	44.22	137.00	181.22
New Zealand	26.16	154.20	180.36
Hong Kong SAR	10.22	167.80	178.02
Vietnam	49.04	123.00	172.04
Seychelles	127.34	44.30	171.64
Guinea-Bissau	163.31	4.90	168.21
Jordan	61.39	104.60	165.99
Brazil	68.90	95.80	164.70
China, People's Republic of	18.59	145.10	163.69
Israel	77.57	85.90	163.47
Australia	17.63	143.70	161.33
Hungary	78.26	81.40	159.66
Mauritius	49.28	106.80	156.08
Belize	81.42	73.00	154.42
Egypt	76.18	75.10	151.28
Cape Verde	70.76	78.10	148.86
Morocco	47.71	100.80	148.51
India	77.69	70.40	148.09
Nicaragua	81.28	66.70	147.98
Congo, Dem. Rep. of	138.26	7.30	145.56
Bahamas, The	41.26	102.70	143.96
Korea, Republic of	32.56	109.40	141.96
Finland	43.90	98.00	141.90
Dominica	85.29	48.70	133.99
Albania	59.51	68.00	127.51
Latvia	32.83	94.30	127.13
Sri Lanka	85.27	39.60	124.87
United Arab Emirates	27.12	97.50	124.62
Panama	39.87	83.80	123.67
Ukraine	34.64	88.60	123.24
Slovenia	29.38	93.40	122.78
Qatar	36.70	76.20	112.90
Estonia	7.15	105.40	112.55
Poland	50.92	61.40	112.32
Croatia	35.41	76.40	111.81
Bahrain	26.58	84.60	111.18
Tunisia	42.78	68.30	111.08
Guyana	60.53	49.10	109.63
Turkey	45.50	63.00	108.50
Nepal	39.39	69.10	108.49
Pakistan	57.29	48.40	105.69
Bhutan	74.74	30.90	105.64
Bangladesh	43.48	60.40	103.88
Kuwait	14.33	86.80	101.13
Sudan	80.60	20.00	100.60
Chile	6.21	93.50	99.71
Lithuania	29.46	70.00	99.46
Philippines	48.89	48.70	97.59
Colombia	35.19	61.50	96.69
Czech Republic	35.34	60.50	95.84
Ghana	66.48	28.70	95.18
El Salvador	48.55	45.40	93.95
Kenya	49.17	43.10	92.27
Sao Tome and Principe	65.78	25.40	91.18
Bolivia	40.54	49.50	90.04
Uruguay	60.65	28.80	89.45
Mexico	44.94	43.70	88.64
Bosnia and Herzegovina	35.37	52.90	88.27
Cote d'Ivoire	65.01	23.00	88.01
Argentina	59.02	28.00	87.02
Gambia, The	58.29	28.60	86.89
Maldives	0.00	86.50	86.50
Bulgaria	16.06	69.60	85.66
Costa Rica	28.02	54.60	82.62
Romania	29.91	52.70	82.61
Togo	55.22	27.30	82.52
Lao People's Democratic Republic	61.64	20.80	82.44
Tonga	38.25	43.20	81.45
Honduras	23.68	54.70	78.38
Malawi	45.51	32.00	77.51
Comoros	56.93	20.50	77.43
Montenegro	0.00	76.20	76.20
Burundi	52.28	23.40	75.68
Djibouti	39.53	32.30	71.83
Yemen, Republic of	51.04	20.30	71.34
Syrian Arab Republic	27.32	43.60	70.92
Georgia	37.38	32.90	70.28
Dominican Republic	28.44	40.60	69.04
Moldova	27.56	41.40	68.96
Trinidad and Tobago	35.45	32.30	67.75
Angola	38.28	29.20	67.48
Indonesia	28.60	37.00	65.60
Kazakhstan	10.93	54.60	65.53
Macedonia, former Yugoslav Republic of	20.82	43.50	64.32
Solomon Islands	28.28	35.10	63.38
Cameroon	54.06	8.30	62.36
Venezuela	36.38	25.90	62.28
Guatemala	22.96	39.20	62.16
Namibia	15.74	46.00	61.74
Vanuatu	0.00	61.60	61.60
Tanzania	42.76	18.10	60.86
Armenia	40.63	20.00	60.63
Belarus	25.15	34.10	59.25
Iran, Islamic Republic of	21.58	37.20	58.78
Senegal	31.96	26.60	58.56
Mauritania	0.00	52.90	52.90
Nigeria	15.49	36.90	52.39
Mozambique	29.31	22.60	51.91
Oman	7.75	41.30	49.05
Haiti	24.77	23.60	48.37
Paraguay	18.04	30.20	48.24
Serbia	0.00	48.00	48.00
Cambodia	28.75	19.10	47.85
Benin	27.52	19.30	46.82
Suriname	20.35	26.20	46.55
Samoa	0.00	46.50	46.50
Peru	27.38	18.90	46.28
Zambia	27.67	18.50	46.17
Madagascar	33.74	11.80	45.54
Russian Federation	10.88	33.70	44.58
Burkina Faso	27.86	14.80	42.66
Central African Republic	26.90	15.30	42.20
Congo, Republic of	57.59	-15.90	41.69
Chad	31.41	8.00	39.41
Ecuador	14.67	24.40	39.07
Papua New Guinea	0.00	39.00	39.00
Mali	23.93	10.70	34.63
Azerbaijan	12.11	22.50	34.61
Uganda	22.22	11.80	34.02
Gabon	26.07	7.60	33.67
Brunei Darussalam	0.00	32.20	32.20
Lesotho	45.35	-14.70	30.65
Mongolia	0.00	29.60	29.60
Niger	15.78	12.50	28.28
Swaziland	14.66	9.10	23.76
Saudi Arabia	15.97	0.60	16.57
Kosovo	0.00	14.10	14.10
Botswana	14.96	-1.00	13.96
Sierra Leone	0.00	10.90	10.90
Afghanistan, Islamic Rep. of	0.00	3.40	3.40
Global Average	47.90	72.18	120.07
Source: www.worldbank.org, www.imf.org

The Philippines is totally not out of the woods yet.  Since at least 60% of the global economy is experiencing a slowdown, there's a strong chance that the Philippine economy will experience a slowdown as well in the not too distant future. Let's not forget that the economies of Iceland, Ireland, and Spain were brought down by a banking crisis.  Iceland's banking sector was huge relative to the size of its economy and when the financial crisis of 2008 struck, it's banking system collapsed as well.  Both Ireland and Spain experienced massive real estate bubbles.  The their subsequent bursting led to an explosion of non-performing loans in the banking system.  The ratio of Philippine NPLs to GDP was only 1.61% as of 2011, well below the global average of 5.56% for the same period.  Lest we get too complacent, we have to remember that Ireland's NPL to GDP ratio was only 1.56% in 2007.  A year later, during the 2008 financial crisis, it was 5.39%.  The following year, it nearly quadrupled to 20.14% and has remained above 20% ever since.  We could suffer the same fate, if we're not too careful.

Global Economies
NPL as a % of GDP
2007 to 2010
Country name	2007	2008	2009	2010	2011
Iceland	0.00%	0.00%	82.63%	66.59%	56.92%
Ireland	1.56%	5.39%	20.14%	20.06%	20.76%
Cyprus	0.00%	10.08%	13.63%	17.68%	20.14%
Greece	5.12%	5.80%	8.90%	15.13%	17.08%
Latvia	0.72%	3.22%	15.47%	17.02%	14.59%
Malta	6.94%	6.91%	8.81%	11.22%	11.62%
Ukraine	1.83%	3.20%	12.14%	12.16%	11.30%
Lithuania	0.60%	2.95%	13.51%	12.73%	10.98%
United States	3.42%	6.66%	12.68%	11.41%	10.97%
Kazakhstan	0.00%	2.76%	11.58%	10.81%	10.68%
Serbia	0.00%	4.55%	7.44%	9.73%	10.23%
Croatia	3.44%	3.65%	5.96%	9.21%	10.18%
Albania	2.11%	4.36%	7.14%	9.33%	9.95%
Bulgaria	1.17%	1.61%	4.45%	8.44%	9.64%
Denmark	1.23%	2.52%	7.32%	8.83%	9.06%
Hungary	1.74%	2.43%	5.45%	7.92%	7.87%
Romania	0.91%	1.33%	4.16%	6.53%	7.37%
Bosnia and Herzegovina	1.86%	2.08%	3.12%	7.41%	6.75%
Pakistan	3.68%	5.59%	6.10%	6.81%	6.65%
Lebanon	18.34%	12.62%	9.79%	7.07%	6.60%
Portugal	2.32%	3.20%	5.46%	6.90%	6.53%
Netherlands	0.00%	3.33%	7.17%	5.94%	5.70%
Morocco	7.19%	5.92%	5.54%	4.66%	5.59%
Poland	2.41%	2.69%	4.91%	5.59%	5.56%
Thailand	10.40%	7.44%	7.26%	5.28%	5.28%
Ghana	1.47%	2.15%	4.65%	5.00%	4.76%
Estonia	0.45%	1.82%	5.48%	5.34%	4.46%
South Africa	2.73%	6.78%	10.87%	10.58%	4.42%
Macedonia, FYR	2.51%	2.77%	3.87%	4.37%	4.25%
Moldova	1.49%	2.07%	6.79%	4.95%	4.23%
Bhutan	0.00%	0.00%	2.10%	2.11%	3.89%
Malaysia	7.37%	5.52%	4.95%	4.49%	3.83%
Czech Republic	1.39%	1.78%	3.15%	3.90%	3.81%
Austria	2.79%	2.49%	3.24%	3.85%	3.65%
Georgia	0.81%	4.19%	5.86%	4.15%	3.53%
Russian Federation	0.61%	0.91%	3.20%	3.15%	3.26%
Australia	0.82%	1.86%	2.87%	3.25%	3.21%
Brazil	2.77%	3.00%	4.02%	2.95%	3.15%
Mauritius	2.48%	2.16%	3.52%	3.11%	3.10%
Kenya	3.94%	3.59%	3.40%	3.21%	2.81%
Seychelles	1.81%	1.34%	1.68%	2.85%	2.60%
Sierra Leone	0.20%	1.32%	1.16%	2.87%	2.58%
Chile	0.68%	0.93%	2.71%	2.40%	2.40%
Turkey	1.77%	2.00%	3.53%	2.64%	2.15%
Colombia	1.68%	2.16%	2.46%	1.90%	1.91%
El Salvador	0.98%	1.30%	1.68%	1.74%	1.74%
Philippines*	2.80%	2.13%	2.00%	1.87%	1.61%
China	7.92%	2.90%	2.32%	1.61%	1.60%
Hong Kong SAR, China	1.00%	1.50%	2.68%	1.59%	1.48%
Armenia	0.29%	0.75%	0.96%	0.77%	1.43%
Dominican Republic	1.57%	1.33%	1.62%	1.15%	1.21%
Costa Rica	0.58%	0.81%	1.09%	0.96%	1.17%
Indonesia	1.66%	1.18%	1.22%	0.95%	1.12%
Belarus	0.51%	0.56%	1.43%	1.59%	1.07%
Panama	1.23%	1.46%	1.17%	0.96%	1.01%
Namibia	1.36%	1.36%	1.24%	1.06%	0.98%
Bolivia	3.00%	2.08%	1.73%	1.09%	0.95%
Ecuador	0.84%	0.76%	1.00%	0.92%	0.95%
Mexico	0.89%	1.12%	1.22%	0.90%	0.91%
Oman	1.05%	0.61%	1.45%	1.24%	0.87%
Guatemala	0.61%	0.84%	1.06%	0.81%	0.78%
Venezuela, RB	0.24%	0.38%	0.78%	0.77%	0.73%
Paraguay	0.25%	0.28%	0.48%	0.42%	0.62%
Mozambique	0.26%	0.26%	0.41%	0.49%	0.57%
Luxembourg	0.73%	1.10%	1.33%	0.37%	0.51%
Finland	0.26%	0.35%	0.59%	0.60%	0.50%
Argentina	0.77%	0.66%	0.84%	0.53%	0.47%
Peru	0.43%	0.42%	0.51%	0.47%	0.47%
Uganda	0.23%	0.27%	0.50%	0.35%	0.47%
Lesotho	-0.55%	-0.74%	-0.54%	-0.23%	0.02%
Montenegro	2.50%	6.34%	10.29%	14.26%	NA
Italy	5.90%	6.47%	9.91%	12.08%	NA
Spain	1.78%	6.01%	9.39%	10.76%	NA
Tunisia	11.33%	10.17%	9.02%	8.93%	NA
United Kingdom	1.69%	3.42%	8.02%	8.90%	NA
Jordan	4.69%	4.66%	7.01%	7.89%	NA
Egypt, Arab Rep.	16.23%	11.50%	10.06%	7.63%	NA
Nigeria	1.92%	0.08%	10.74%	6.14%	NA
Kuwait	2.61%	4.44%	9.98%	5.87%	NA
Japan	4.17%	5.12%	6.23%	5.87%	NA
Senegal	4.54%	4.26%	4.97%	5.86%	NA
France	3.29%	3.48%	4.64%	5.58%	NA
United Arab Emirates	1.74%	1.68%	4.19%	5.17%	NA
Slovenia	1.47%	1.57%	2.15%	3.51%	NA
Belgium	1.34%	1.92%	3.68%	3.28%	NA
Korea, Rep.	0.69%	1.20%	1.31%	1.96%	NA
India	1.52%	1.56%	1.62%	1.75%	NA
Singapore	1.04%	1.40%	2.33%	1.51%	NA
Swaziland	0.49%	0.14%	0.74%	1.38%	NA
Gabon	0.22%	0.52%	0.55%	1.00%	NA
Uruguay	0.27%	0.35%	0.35%	0.32%	NA
Germany	3.37%	3.67%	4.39%	NA	NA
Sweden	0.78%	1.35%	2.88%	NA	NA
Israel	1.31%	1.35%	1.20%	NA	NA
Switzerland	0.55%	0.91%	0.77%	NA	NA
Kosovo	0.00%	0.39%	0.62%	NA	NA
Global Average	2.28%	2.78%	5.48%	5.76%	5.56%
* Estimated 2011
Source: www.worldbank.org, www.bsp.gov.ph