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

Editor's Note: This is an update of two previous blog posts: "The Philippine Banking System's True Exposure to Real Estate" and "Is There a Real Estate Bubble in the Philippines?"

Last July 25, 2012, the BSP encouraged banks, particularly Universal and Commercial Banks that continue to reflect unbooked losses or "deferred charges" arising from the 1997 Asian Financial Crisis on their balance sheets, to charge those losses against retained earnings.  This implies that the banks have a lot of "legacy assets" from a crisis that began more than 15 years ago.  Considering that the Asian Financial Crisis was primarily due to a real estate bubble, most of these so-called "legacy assets" consist of past real estate loans gone bad that are still on the books of the Philippine Banking System.

ROPOA

Our previous estimate on the true exposure of the Philippine Banking System to Real Estate (See "Is There a Real Estate Bubble in the Philippines") is inadequate because it does not include the bank's ROPOA or acquired real estate. As seen on the chart below, ROPOA as a percentage of GDP peaked at 5.18% by December 2002.  At that point in time, ROPOA comprised almost half the Philippine Banking System's total real estate exposure of 10.88% as of December 2002.  Since then, ROPOA has steadily declined as a percentage of GDP and now comprises only 1.60% of GDP as of March 2012.  However, Real Estate Loans as a percentage of GDP has been rising gradually since establishing a low of 3.75% of GDP as of March 2008.  As of March 2012, Real Estate Loans now comprise 6.44% of GDP - a level not seen since September 1999.  As a result, the Philippine Banking Industry's true exposure to Real Estate now stands at 8.55% of GDP as of March 2012.  This indicates that the Philippine Banking System's exposure to Real Estate is approaching December 2006 levels.

Distressed Assets

But ROPOA does not make the entire picture.  The banking system's true legacy assets are distressed assets which largely includes ROPOA as well as other bad bank assets.  Again, distressed assets as percentage of GDP peaked at 14.65% of GDP as of December 2001.  This ratio has steadily declined since then.  As of March 2012, distressed assets amount to only 2.81% of GDP.  When using distressed assets instead of ROPOA, the banking system's true exposure to the real estate sector peaked at an eye-popping 21.32% of GDP as of December 2000.  That number has declined to less than half the peak rate.  As of March 2012, the banking system's true exposure to the real estate sector now stands at 9.77%, slightly elevated above the low of 8.72% as of March 2008 but nowhere near its peak levels.

Planters Development Bank Takes the Bronze in NPLs as a Percentage of Stockholders Equity as of June 30, 2012

Editor's Note: Data is culled from  the Published Statements of Condition of individual thrift banks found in www.bsp.gov.ph.  Banks highlighted in yellow are classified as Distressed Banks.  The level of distressed is measured by the Ratio of their Total Distressed Assets/Total Capital Cushion as of June 30, 2012.  See a previous blog post: "Philippine Thrift Banks Continue to Improve in the 2nd Quarter of 2012".

NPLs.  Short for Non-Performing Loans.  The NPL Ratio, or the ratio of a bank's Non-Performing Loans (NPL) to Total Loan Portfolio (TLP) is a frequently cited figure in the general media to indicate a bank's financial health, or the health of the banking system as a whole.  See: http://business.inquirer.net/48943/banks-reduce-exposure-to-bad-debts-have-more-cash-to-loan-out%E2%80%94bsp.

In the Philippine Thrift Banking Industry, Non-Performing Loans stood at PHP 19.830 billion as of June 30, 2012 - approximately 4.87% of the Philippine Thrift Banking Industry's Total Loan Portfolio - Net of PHP 407.368 billion.

Philippine Thrift Banking System
NPL as % of TLP-Net
June 30, 2012
	NPL	TLP-Net	NPL/TLP
Bank	(In Php)	(In Php)	(In %)
Northpoint Development Bank, Inc.	5,705,839.36	1,869,665.92	305.18%
Pacific Ace Savings Bank, Inc.	10,252,586.49	14,484,805.38	70.78%
Metro-Cebu Public Savings Bank	30,863,778.38	48,479,236.03	63.66%
Comsavings Bank	197,917,363.94	350,740,295.16	56.43%
Silangan Savings and Loan Bank, Inc.	16,670,323.99	34,494,582.77	48.33%
Sun Savings Bank, Inc.	5,357,675.89	15,094,700.16	35.49%
Citibank Savings Inc.	2,856,110,549.96	8,384,518,529.47	34.06%
Malasiqui Progressive Savings and Loan Bank, Inc.	14,466,468.15	50,584,024.99	28.60%
Progress Savings and Loan Bank, Inc.	1,338,363.83	4,835,874.11	27.68%
Bataan Development Bank	40,674,274.39	152,823,325.49	26.62%
Lemery Savings and Loan Bank, Inc.	16,874,914.00	69,795,623.91	24.18%
Pride Star Development Bank, Inc.	8,692,326.39	36,843,209.72	23.59%
Farmers Savings and Loan Bank, Inc.	50,258,569.72	223,087,106.07	22.53%
Pampanga Development Bank	38,978,520.76	179,572,569.63	21.71%
Sampaguita Savings Bank, Inc.	10,572,407.09	50,248,485.44	21.04%
Quezon Coconut Producers Savings and Loan Bank	9,350,997.62	46,095,116.67	20.29%
Opportunity Kauswagan Bank, Inc.	47,684,373.36	244,466,985.22	19.51%
Security Bank Savings Corporation	515,520,772.12	3,395,634,954.06	15.18%
Cordillera Savings Bank, Inc.	21,144,063.87	140,412,050.46	15.06%
Philippine Postal Savings Bank, Inc.	380,024,247.12	2,728,397,058.22	13.93%
Business and Consumers Bank	12,969,732.74	102,214,183.62	12.69%
University Savings Bank, Inc.	51,628,327.48	432,813,979.68	11.93%
Hiyas Banking Corporation	40,185,600.53	368,935,912.58	10.89%
Allied Savings Bank	243,874,386.39	2,286,321,857.43	10.67%
Maritime Savings Bank Corporation	12,532,225.20	117,760,011.39	10.64%
Tong Yang Savings Bank, Inc.	90,160,279.49	881,823,607.97	10.22%
Bataan Savings and Loan Bank	3,084,817.02	31,185,673.18	9.89%
Village Bank, Inc.	28,818,153.47	339,283,229.03	8.49%
Malayan Bank Savings and Mortgage Bank, Inc.	313,632,569.20	3,888,868,219.48	8.06%
Luzon Development Bank	120,635,339.90	1,505,292,322.36	8.01%
Legazpi Savings Bank, Inc.	101,545,758.77	1,316,961,383.96	7.71%
Planters Development Bank	2,560,629,104.28	33,235,612,946.99	7.70%
Iloilo City Development Bank	16,904,440.87	242,685,753.89	6.97%
Microfinance Maximum Savings Bank, Inc.	1,056,155.26	15,382,763.37	6.87%
Dungganon Bank (A Microfinance Thrift Bank), Inc.	6,045,070.42	88,240,777.42	6.85%
Penbank, Inc. (A Private Development Bank)	66,828,825.29	992,717,997.78	6.73%
Life Savings Bank, Inc.	3,465,831.47	54,138,605.19	6.40%
First Consolidated Bank, Inc.	372,255,186.21	6,075,918,134.60	6.13%
Philippine Savings Bank	4,356,363,732.95	75,991,591,549.78	5.73%
Sterling Bank of Asia, Inc.	790,624,665.59	14,828,580,124.53	5.33%
Philippine Business Bank, Inc.	764,916,007.37	15,848,408,952.74	4.83%
Optimum Development Bank, Inc.	32,270,327.60	715,434,371.84	4.51%
Producers Savings Bank Corporation	150,497,298.52	3,486,064,084.48	4.32%
Dumaguete City Development Bank, Inc.	16,734,272.56	396,673,725.59	4.22%
World Partners Bank	30,418,730.86	841,238,193.47	3.62%
Wealth Development Bank Corporation	57,490,084.44	1,592,417,658.92	3.61%
RCBC Savings Bank, Inc.	1,240,532,347.87	34,755,158,754.67	3.57%
UCPB Savings Bank	187,376,711.23	5,440,675,119.72	3.44%
China Bank Savings Inc.	82,041,848.35	2,807,516,592.00	2.92%
BPI Direct Savings Bank, Inc.	158,748,252.54	5,432,888,203.95	2.92%
Equicom Savings Bank, Inc.	91,828,345.71	3,211,466,848.36	2.86%
Bank One Savings and Trust Corporation	19,402,717.57	713,989,303.26	2.72%
Card SME Bank, Inc., A Thrift Bank	11,987,442.75	453,488,263.37	2.64%
Tower Development Bank	3,682,116.29	143,019,035.08	2.57%
BPI Globe BanKO, Inc., A Savings Bank	54,467,929.26	2,188,003,299.43	2.49%
CityState Savings Bank, Inc.	34,636,907.54	1,451,505,166.65	2.39%
BPI Family Savings Bank, Inc.	3,101,887,737.55	135,760,881,316.65	2.28%
Century Savings Bank Corporation	10,752,766.23	498,115,266.79	2.16%
City Savings Bank, Inc.	203,764,171.46	11,534,816,408.46	1.77%
Queen City Development Bank, Inc.	14,159,937.67	1,321,719,166.55	1.07%
HSBC Savings Bank (Phils), Inc.	89,622,250.40	11,945,661,353.63	0.75%
Merchants Savings and Loan Association, Inc.	1,110,039.79	156,464,948.25	0.71%
Isla Bank (A Thrift Bank), Inc.	0.00	619,934,759.37	0.00%
Philippine Resources Savings Banking Corporation	0.00	6,472,098,955.98	0.00%
United Overseas Bank Philippines	0.00	611,561,387.68	0.00%
BDO Elite Savings Bank, Inc.	0.00	0.00	NA
Grand Total	19,830,026,862.52	407,368,008,370.00	4.87%

Source: www.bsp.gov.ph

There are seven Thrift Banks with an NPL Ratio greater than 30% of Total Loan Portfolio - Net (TLP-Net).  These are as follows:

1. Northpoint Development Bank (305.18% of TLP-Net)
2. Pacific Ace Savings Bank (74.02% of TLP-Net)
3. Metro Cebu Public Savings Bank (73.36% of TLP-Net)
4. Comsavings Bank (56.43% of TLP-Net)
5. Silangan Savings and Loan Bank, Inc. (48.33% of TLP-Net)
6. Sun Savings Bank (35.49% of TLP-Net)
7. Citibank Savings Inc. (34.06% of TLP-Net)

Of these banks, two banks are considered distressed:

1. Comsavings Bank (formerly GSIS Family Bank)
2. Silangan Savings and Loan Bank, Inc.

The ratio of a bank's NPLs to its total Stockholders Equity (SE) maybe more important than the ratio of its NPLs to Total Loan Portfolio.  The idea behind this is that NPLs are fragile things.  As a loan deteriorates, its recoverable value will deteriorate as well.  A foreclosure might result in a loan recovery that is a fraction of the loans original value.  Therefore, banks with high NPL Ratios relative to their Stockholders Equity may face a significant loss of capital if a substantial amount of their NPLs are written of as a loss.

Philippine Thrift Banking System
NPL as % of SE
June 30, 2012
	NPL	SE	NPL/SE
Bank	(In Php)	(In Php)	(In %)
Silangan Savings and Loan Bank, Inc.	16,670,323.99	9,740,651.89	171.14%
Citibank Savings Inc.	2,856,110,549.96	1,818,756,670.18	157.04%
Planters Development Bank	2,560,629,104.28	3,931,756,700.13	65.13%
Security Bank Savings Corporation	515,520,772.12	795,088,386.40	64.84%
Bataan Development Bank	40,674,274.39	70,387,217.02	57.79%
Legazpi Savings Bank, Inc.	101,545,758.77	178,699,023.83	56.83%
Comsavings Bank	197,917,363.94	350,468,111.01	56.47%
Philippine Postal Savings Bank, Inc.	380,024,247.12	688,770,339.88	55.17%
Opportunity Kauswagan Bank, Inc.	47,684,373.36	87,108,376.48	54.74%
Metro-Cebu Public Savings Bank	30,863,778.38	60,255,751.33	51.22%
Farmers Savings and Loan Bank, Inc.	50,258,569.72	100,549,296.43	49.98%
Sterling Bank of Asia, Inc.	790,624,665.59	1,633,872,061.27	48.39%
Village Bank, Inc.	28,818,153.47	70,653,647.74	40.79%
Pampanga Development Bank	38,978,520.76	105,904,741.40	36.81%
Philippine Savings Bank	4,356,363,732.95	13,303,936,411.40	32.74%
Malayan Bank Savings and Mortgage Bank, Inc.	313,632,569.20	975,332,768.21	32.16%
Luzon Development Bank	120,635,339.90	382,298,596.47	31.56%
Malasiqui Progressive Savings and Loan Bank, Inc.	14,466,468.15	49,198,079.06	29.40%
Iloilo City Development Bank	16,904,440.87	62,433,690.20	27.08%
Penbank, Inc. (A Private Development Bank)	66,828,825.29	260,723,835.90	25.63%
Hiyas Banking Corporation	40,185,600.53	157,846,553.87	25.46%
University Savings Bank, Inc.	51,628,327.48	205,163,329.73	25.16%
Allied Savings Bank	243,874,386.39	976,492,885.94	24.97%
Lemery Savings and Loan Bank, Inc.	16,874,914.00	69,169,391.20	24.40%
First Consolidated Bank, Inc.	372,255,186.21	1,671,795,340.03	22.27%
Tong Yang Savings Bank, Inc.	90,160,279.49	407,756,152.68	22.11%
Cordillera Savings Bank, Inc.	21,144,063.87	97,381,465.00	21.71%
Producers Savings Bank Corporation	150,497,298.52	701,811,191.57	21.44%
BPI Family Savings Bank, Inc.	3,101,887,737.55	14,481,315,010.85	21.42%
Equicom Savings Bank, Inc.	91,828,345.71	461,617,258.29	19.89%
BPI Direct Savings Bank, Inc.	158,748,252.54	801,926,465.90	19.80%
Philippine Business Bank, Inc.	764,916,007.37	3,922,725,430.38	19.50%
World Partners Bank	30,418,730.86	157,957,368.73	19.26%
Maritime Savings Bank Corporation	12,532,225.20	65,402,781.73	19.16%
RCBC Savings Bank, Inc.	1,240,532,347.87	6,792,900,833.67	18.26%
Business and Consumers Bank	12,969,732.74	78,446,370.26	16.53%
Sampaguita Savings Bank, Inc.	10,572,407.09	64,708,123.36	16.34%
Wealth Development Bank Corporation	57,490,084.44	353,186,841.84	16.28%
Quezon Coconut Producers Savings and Loan Bank	9,350,997.62	57,580,765.13	16.24%
BPI Globe BanKO, Inc., A Savings Bank	54,467,929.26	360,144,746.12	15.12%
Pacific Ace Savings Bank, Inc.	10,252,586.49	72,319,136.67	14.18%
Pride Star Development Bank, Inc.	8,692,326.39	67,743,003.08	12.83%
Northpoint Development Bank, Inc.	5,705,839.36	50,002,124.18	11.41%
City Savings Bank, Inc.	203,764,171.46	1,977,741,378.55	10.30%
Dungganon Bank (A Microfinance Thrift Bank), Inc.	6,045,070.42	62,917,082.13	9.61%
UCPB Savings Bank	187,376,711.23	2,125,681,500.16	8.81%
Dumaguete City Development Bank, Inc.	16,734,272.56	203,578,072.13	8.22%
Sun Savings Bank, Inc.	5,357,675.89	72,664,822.80	7.37%
China Bank Savings Inc.	82,041,848.35	1,134,231,220.75	7.23%
Card SME Bank, Inc., A Thrift Bank	11,987,442.75	179,116,409.99	6.69%
Life Savings Bank, Inc.	3,465,831.47	63,317,167.29	5.47%
Optimum Development Bank, Inc.	32,270,327.60	660,520,247.44	4.89%
CityState Savings Bank, Inc.	34,636,907.54	773,945,359.88	4.48%
Bataan Savings and Loan Bank	3,084,817.02	77,808,302.16	3.96%
Bank One Savings and Trust Corporation	19,402,717.57	520,315,658.47	3.73%
Tower Development Bank	3,682,116.29	113,529,745.58	3.24%
HSBC Savings Bank (Phils), Inc.	89,622,250.40	2,938,428,344.64	3.05%
Queen City Development Bank, Inc.	14,159,937.67	669,119,640.27	2.12%
Microfinance Maximum Savings Bank, Inc.	1,056,155.26	62,353,596.96	1.69%
Progress Savings and Loan Bank, Inc.	1,338,363.83	84,103,829.68	1.59%
Century Savings Bank Corporation	10,752,766.23	883,428,855.96	1.22%
Merchants Savings and Loan Association, Inc.	1,110,039.79	658,930,240.51	0.17%
BDO Elite Savings Bank, Inc.	0.00	1,527,059,062.56	0.00%
Isla Bank (A Thrift Bank), Inc.	0.00	630,420,695.84	0.00%
Philippine Resources Savings Banking Corporation	0.00	1,195,719,804.03	0.00%
United Overseas Bank Philippines	0.00	704,856,569.14	0.00%
Grand Total	19,830,026,862.52	74,331,114,533.36	26.68%

Source: www.bsp.gov.ph

Of the sixty-six thrift banks in this list, seventeen have an NPL to Stockholders Equity Ratio of 30% or more.  These banks are as follows:

1. Silangan Savings and Loan Bank, Inc. (171.14% of SE)
2. Citibank Savings Inc. (157.04% of SE)
3. Planters Development Bank (65.13% of SE)
4. Security Bank Savings Corporation (64.84% of SE)
5. Bataan Development Bank (57.79% of SE)
6. Legazpi Savings Bank Inc. (56.83% of SE)
7. Comsavings Bank (56.47% of SE)
8. Philippine Postal Savings Bank (55.17% of SE)
9. Opportunity Kauswagan Bank, Inc. (54.74% of SE)
10. Metro-Cebu Public Savings Bank (51.22% of SE)
11. Farmers Savings & Loan Bank (49.98% of SE)
12. Sterling Bank of Asia, Inc. (48.39% of SE)
13. Village Bank, Inc. (40.79% of SE)
14. Pampanga Development Bank (36.81% of SE)
15. Philippine Savings Bank (32.74% of SE)
16. Malayan Bank Savings and Mortgage Bank, Inc. (32.16% of SE_
17. Luzon Development Bank (31.56% of SE)

Another indicator of a bank's financial health is the level of DOSRI Loans in relation to a bank's Total Loan Portfolio.  Under current banking regulations, the limit on the amount of individual loans to DOSRI, of which 70% must be secured, should not exceed a bank's parent company's regulatory capital or 15% of the bank's parent company's total loan portfolio, whichever is lower.  These limits do not apply to loans secured by assets considered as non-risk as defined in the regulations. Therefore banks with significantly high DOSRI Loan to Total Loan Portfolio - Net ratios may be bumping up or exceeding the limits of compliance with DOSRI regulations.

Of the sixty-six banks listed as Thrift Banks, twenty-two reported having no DOSRI Loans.  Of the forty-four thrift banks with DOSRI Loans, fifteen had DOSRI Loans that made up less than 1% of their Total Loan Portfolios.  However, several thrift banks had DOSRI Loans that comprised more than 15% of their Total Loan Portfolios.  They are as follows:

1. Penbank, Inc. (21.89% of TLP-Net)
2. The Queen City Development Bank (21.46% of TLP-Net)
3. CityState Savings Bank, Inc. (20.46% of TLP-Net)
4. Life Savings Bank (19.27% of TLP-Net)

Philippine Thrift Banking System
DOSRI as % of TLP-Net
June 30, 2012
	DOSRI	TLP-Net	DOSRI/TLP-Net
Bank	(In Php)	(In Php)	(In %)
Penbank, Inc. (A Private Development Bank)	217,300,169.60	992,717,997.78	21.89%
Queen City Development Bank, Inc.	283,693,169.37	1,321,719,166.55	21.46%
CityState Savings Bank, Inc.	296,981,670.93	1,451,505,166.65	20.46%
Life Savings Bank, Inc.	10,717,950.20	54,138,605.19	19.80%
Silangan Savings and Loan Bank, Inc.	5,118,257.50	34,494,582.77	14.84%
World Partners Bank	108,369,578.06	841,238,193.47	12.88%
Village Bank, Inc.	40,911,220.58	339,283,229.03	12.06%
Malasiqui Progressive Savings and Loan Bank, Inc.	5,450,000.00	50,584,024.99	10.77%
Pampanga Development Bank	18,406,018.40	179,572,569.63	10.25%
Tower Development Bank	14,571,080.10	143,019,035.08	10.19%
Sampaguita Savings Bank, Inc.	4,500,000.00	50,248,485.44	8.96%
Opportunity Kauswagan Bank, Inc.	19,339,041.10	244,466,985.22	7.91%
Philippine Postal Savings Bank, Inc.	190,660,354.20	2,728,397,058.22	6.99%
Quezon Coconut Producers Savings and Loan Bank	2,378,442.60	46,095,116.67	5.16%
Century Savings Bank Corporation	25,000,000.00	498,115,266.79	5.02%
Luzon Development Bank	72,810,817.87	1,505,292,322.36	4.84%
Maritime Savings Bank Corporation	5,029,322.89	117,760,011.39	4.27%
Bank One Savings and Trust Corporation	29,893,333.33	713,989,303.26	4.19%
Hiyas Banking Corporation	15,151,873.63	368,935,912.58	4.11%
Cordillera Savings Bank, Inc.	5,346,034.96	140,412,050.46	3.81%
Dumaguete City Development Bank, Inc.	15,051,131.19	396,673,725.59	3.79%
Producers Savings Bank Corporation	98,233,426.66	3,486,064,084.48	2.82%
Philippine Savings Bank	1,831,354,695.43	75,991,591,549.78	2.41%
Legazpi Savings Bank, Inc.	26,645,180.28	1,316,961,383.96	2.02%
Comsavings Bank	6,622,529.48	350,740,295.16	1.89%
Planters Development Bank	588,268,255.43	33,235,612,946.99	1.77%
Philippine Business Bank, Inc.	219,932,551.99	15,848,408,952.74	1.39%
University Savings Bank, Inc.	5,311,014.03	432,813,979.68	1.23%
Malayan Bank Savings and Mortgage Bank, Inc.	39,528,633.77	3,888,868,219.48	1.02%
HSBC Savings Bank (Phils), Inc.	94,527,359.43	11,945,661,353.63	0.79%
Lemery Savings and Loan Bank, Inc.	349,475.00	69,795,623.91	0.50%
Security Bank Savings Corporation	16,512,938.23	3,395,634,954.06	0.49%
RCBC Savings Bank, Inc.	145,761,846.86	34,755,158,754.67	0.42%
China Bank Savings Inc.	10,146,125.78	2,807,516,592.00	0.36%
Tong Yang Savings Bank, Inc.	2,188,040.40	881,823,607.97	0.25%
Wealth Development Bank Corporation	3,175,468.29	1,592,417,658.92	0.20%
First Consolidated Bank, Inc.	11,003,949.28	6,075,918,134.60	0.18%
Farmers Savings and Loan Bank, Inc.	388,631.04	223,087,106.07	0.17%
Equicom Savings Bank, Inc.	2,870,501.13	3,211,466,848.36	0.09%
UCPB Savings Bank	3,085,789.10	5,440,675,119.72	0.06%
Sterling Bank of Asia, Inc.	5,230,184.85	14,828,580,124.53	0.04%
BPI Family Savings Bank, Inc.	46,256,800.06	135,760,881,316.65	0.03%
BPI Direct Savings Bank, Inc.	1,824,071.66	5,432,888,203.95	0.03%
Isla Bank (A Thrift Bank), Inc.	109,595.85	619,934,759.37	0.02%
Allied Savings Bank	0.00	2,286,321,857.43	0.00%
Bataan Development Bank	0.00	152,823,325.49	0.00%
Bataan Savings and Loan Bank	0.00	31,185,673.18	0.00%
BPI Globe BanKO, Inc., A Savings Bank	0.00	2,188,003,299.43	0.00%
Business and Consumers Bank	0.00	102,214,183.62	0.00%
Card SME Bank, Inc., A Thrift Bank	0.00	453,488,263.37	0.00%
Citibank Savings Inc.	0.00	8,384,518,529.47	0.00%
City Savings Bank, Inc.	0.00	11,534,816,408.46	0.00%
Dungganon Bank (A Microfinance Thrift Bank), Inc.	0.00	88,240,777.42	0.00%
Iloilo City Development Bank	0.00	242,685,753.89	0.00%
Merchants Savings and Loan Association, Inc.	0.00	156,464,948.25	0.00%
Metro-Cebu Public Savings Bank	0.00	48,479,236.03	0.00%
Microfinance Maximum Savings Bank, Inc.	0.00	15,382,763.37	0.00%
Northpoint Development Bank, Inc.	0.00	1,869,665.92	0.00%
Optimum Development Bank, Inc.	0.00	715,434,371.84	0.00%
Pacific Ace Savings Bank, Inc.	0.00	14,484,805.38	0.00%
Philippine Resources Savings Banking Corporation	0.00	6,472,098,955.98	0.00%
Pride Star Development Bank, Inc.	0.00	36,843,209.72	0.00%
Progress Savings and Loan Bank, Inc.	0.00	4,835,874.11	0.00%
Sun Savings Bank, Inc.	0.00	15,094,700.16	0.00%
United Overseas Bank Philippines	0.00	611,561,387.68	0.00%
BDO Elite Savings Bank, Inc.	0.00	0.00	NA
Grand Total	4,546,006,530.54	407,368,008,370.00	1.12%

Source: www.bsp.gov.ph

DOSRI Rules indicate that, in the aggregate, DOSRI Loans should not exceed the total equity of the bank.  Therefore banks with a significantly high DOSRI Loans as a percentage of Stockholders Equity may be approaching DOSRI Limits.

Philippine Thrift Banking System
DOSRI as % of Stockholders Equity
June 30, 2012
	DOSRI	SE	DOSRI/SE
Bank	(In Php)	(In Php)	(In %)
Penbank, Inc. (A Private Development Bank)	217,300,169.60	260,723,835.90	83.34%
World Partners Bank	108,369,578.06	157,957,368.73	68.61%
Village Bank, Inc.	40,911,220.58	70,653,647.74	57.90%
Silangan Savings and Loan Bank, Inc.	5,118,257.50	9,740,651.89	52.55%
Queen City Development Bank, Inc.	283,693,169.37	669,119,640.27	42.40%
CityState Savings Bank, Inc.	296,981,670.93	773,945,359.88	38.37%
Philippine Postal Savings Bank, Inc.	190,660,354.20	688,770,339.88	27.68%
Opportunity Kauswagan Bank, Inc.	19,339,041.10	87,108,376.48	22.20%
Luzon Development Bank	72,810,817.87	382,298,596.47	19.05%
Pampanga Development Bank	18,406,018.40	105,904,741.40	17.38%
Life Savings Bank, Inc.	10,717,950.20	63,317,167.29	16.93%
Planters Development Bank	588,268,255.43	3,931,756,700.13	14.96%
Legazpi Savings Bank, Inc.	26,645,180.28	178,699,023.83	14.91%
Producers Savings Bank Corporation	98,233,426.66	701,811,191.57	14.00%
Philippine Savings Bank	1,831,354,695.43	13,303,936,411.40	13.77%
Tower Development Bank	14,571,080.10	113,529,745.58	12.83%
Malasiqui Progressive Savings and Loan Bank, Inc.	5,450,000.00	49,198,079.06	11.08%
Hiyas Banking Corporation	15,151,873.63	157,846,553.87	9.60%
Maritime Savings Bank Corporation	5,029,322.89	65,402,781.73	7.69%
Dumaguete City Development Bank, Inc.	15,051,131.19	203,578,072.13	7.39%
Sampaguita Savings Bank, Inc.	4,500,000.00	64,708,123.36	6.95%
Bank One Savings and Trust Corporation	29,893,333.33	520,315,658.47	5.75%
Philippine Business Bank, Inc.	219,932,551.99	3,922,725,430.38	5.61%
Cordillera Savings Bank, Inc.	5,346,034.96	97,381,465.00	5.49%
Quezon Coconut Producers Savings and Loan Bank	2,378,442.60	57,580,765.13	4.13%
Malayan Bank Savings and Mortgage Bank, Inc.	39,528,633.77	975,332,768.21	4.05%
HSBC Savings Bank (Phils), Inc.	94,527,359.43	2,938,428,344.64	3.22%
Century Savings Bank Corporation	25,000,000.00	883,428,855.96	2.83%
University Savings Bank, Inc.	5,311,014.03	205,163,329.73	2.59%
RCBC Savings Bank, Inc.	145,761,846.86	6,792,900,833.67	2.15%
Security Bank Savings Corporation	16,512,938.23	795,088,386.40	2.08%
Comsavings Bank	6,622,529.48	350,468,111.01	1.89%
Wealth Development Bank Corporation	3,175,468.29	353,186,841.84	0.90%
China Bank Savings Inc.	10,146,125.78	1,134,231,220.75	0.89%
First Consolidated Bank, Inc.	11,003,949.28	1,671,795,340.03	0.66%
Equicom Savings Bank, Inc.	2,870,501.13	461,617,258.29	0.62%
Tong Yang Savings Bank, Inc.	2,188,040.40	407,756,152.68	0.54%
Lemery Savings and Loan Bank, Inc.	349,475.00	69,169,391.20	0.51%
Farmers Savings and Loan Bank, Inc.	388,631.04	100,549,296.43	0.39%
Sterling Bank of Asia, Inc.	5,230,184.85	1,633,872,061.27	0.32%
BPI Family Savings Bank, Inc.	46,256,800.06	14,481,315,010.85	0.32%
BPI Direct Savings Bank, Inc.	1,824,071.66	801,926,465.90	0.23%
UCPB Savings Bank	3,085,789.10	2,125,681,500.16	0.15%
Isla Bank (A Thrift Bank), Inc.	109,595.85	630,420,695.84	0.02%
Allied Savings Bank	0.00	976,492,885.94	0.00%
Bataan Development Bank	0.00	70,387,217.02	0.00%
Bataan Savings and Loan Bank	0.00	77,808,302.16	0.00%
BDO Elite Savings Bank, Inc.	0.00	1,527,059,062.56	0.00%
BPI Globe BanKO, Inc., A Savings Bank	0.00	360,144,746.12	0.00%
Business and Consumers Bank	0.00	78,446,370.26	0.00%
Card SME Bank, Inc., A Thrift Bank	0.00	179,116,409.99	0.00%
Citibank Savings Inc.	0.00	1,818,756,670.18	0.00%
City Savings Bank, Inc.	0.00	1,977,741,378.55	0.00%
Dungganon Bank (A Microfinance Thrift Bank), Inc.	0.00	62,917,082.13	0.00%
Iloilo City Development Bank	0.00	62,433,690.20	0.00%
Merchants Savings and Loan Association, Inc.	0.00	658,930,240.51	0.00%
Metro-Cebu Public Savings Bank	0.00	60,255,751.33	0.00%
Microfinance Maximum Savings Bank, Inc.	0.00	62,353,596.96	0.00%
Northpoint Development Bank, Inc.	0.00	50,002,124.18	0.00%
Optimum Development Bank, Inc.	0.00	660,520,247.44	0.00%
Pacific Ace Savings Bank, Inc.	0.00	72,319,136.67	0.00%
Philippine Resources Savings Banking Corporation	0.00	1,195,719,804.03	0.00%
Pride Star Development Bank, Inc.	0.00	67,743,003.08	0.00%
Progress Savings and Loan Bank, Inc.	0.00	84,103,829.68	0.00%
Sun Savings Bank, Inc.	0.00	72,664,822.80	0.00%
United Overseas Bank Philippines	0.00	704,856,569.14	0.00%
Grand Total	4,546,006,530.54	74,331,114,533.36	6.12%

Source: www.bsp.gov.ph

Banks often take pains to avoid DOSRI Loans from falling past due. Although bank policies often state that DOSRI Loans are made “substantially on the same terms as with other individuals and businesses of comparable risks.  (See Planters Development Bank Annual Report December 31, 2010). Loan underwriting standards should be tighter because a past due DOSRI loan reflects badly on the bank.    DOSRI Loans that fall past due are often:

1. Written off as soon as possible;
2. Refinanced or Restructured to become current (this requires Board of Directors Approval); or are
3. Technically reclassified as a general NPL (like if a loan to a former bank officer falls past due). 

As a result, the Thrift Bank Industry reported that PHP 505.858 million, or 11.13% of its DOSRI Loans fell past due as of June 30, 2012.  This ratio is more than double the Thrift Bank Industry's NPL to TLP-Net Ratio of 4.87% as of the same period.  Of the forty-four banks with DOSRI Loans, forty had zero past due DOSRI Loans.  Of the four remaining banks  in this list, two had past due DOSRI Loans exceeding 30% of their Total DOSRI Loan Portfolio.  These three are as follows:

1. Silangan Savings and Loan Bank, Inc. (64.70% of DOSRI Loans)
2. Cordillera Savings Bank, Inc. (33.13% of DOSRI Loans)

Philippine Thrift Banking System
DOSRI Past Due as % of DOSRI
June 30, 2012
	DOSRI Past Due	DOSRI	DOSRI Past Due/DOSRI
Bank	(In Php)	(In Php)	(In %)
Silangan Savings and Loan Bank, Inc.	3,311,630.00	5,118,257.50	64.70%
Cordillera Savings Bank, Inc.	1,771,325.87	5,346,034.96	33.13%
Philippine Savings Bank	500,774,859.76	1,831,354,695.43	27.34%
UCPB Savings Bank	4.00	3,085,789.10	0.00%
Bank One Savings and Trust Corporation	0.00	29,893,333.33	0.00%
BPI Direct Savings Bank, Inc.	0.00	1,824,071.66	0.00%
BPI Family Savings Bank, Inc.	0.00	46,256,800.06	0.00%
Century Savings Bank Corporation	0.00	25,000,000.00	0.00%
China Bank Savings Inc.	0.00	10,146,125.78	0.00%
CityState Savings Bank, Inc.	0.00	296,981,670.93	0.00%
Comsavings Bank	0.00	6,622,529.48	0.00%
Dumaguete City Development Bank, Inc.	0.00	15,051,131.19	0.00%
Equicom Savings Bank, Inc.	0.00	2,870,501.13	0.00%
Farmers Savings and Loan Bank, Inc.	0.00	388,631.04	0.00%
First Consolidated Bank, Inc.	0.00	11,003,949.28	0.00%
Hiyas Banking Corporation	0.00	15,151,873.63	0.00%
HSBC Savings Bank (Phils), Inc.	0.00	94,527,359.43	0.00%
Isla Bank (A Thrift Bank), Inc.	0.00	109,595.85	0.00%
Legazpi Savings Bank, Inc.	0.00	26,645,180.28	0.00%
Lemery Savings and Loan Bank, Inc.	0.00	349,475.00	0.00%
Life Savings Bank, Inc.	0.00	10,717,950.20	0.00%
Luzon Development Bank	0.00	72,810,817.87	0.00%
Malasiqui Progressive Savings and Loan Bank, Inc.	0.00	5,450,000.00	0.00%
Malayan Bank Savings and Mortgage Bank, Inc.	0.00	39,528,633.77	0.00%
Maritime Savings Bank Corporation	0.00	5,029,322.89	0.00%
Opportunity Kauswagan Bank, Inc.	0.00	19,339,041.10	0.00%
Pampanga Development Bank	0.00	18,406,018.40	0.00%
Penbank, Inc. (A Private Development Bank)	0.00	217,300,169.60	0.00%
Philippine Business Bank, Inc.	0.00	219,932,551.99	0.00%
Philippine Postal Savings Bank, Inc.	0.00	190,660,354.20	0.00%
Planters Development Bank	0.00	588,268,255.43	0.00%
Producers Savings Bank Corporation	0.00	98,233,426.66	0.00%
Queen City Development Bank, Inc.	0.00	283,693,169.37	0.00%
Quezon Coconut Producers Savings and Loan Bank	0.00	2,378,442.60	0.00%
RCBC Savings Bank, Inc.	0.00	145,761,846.86	0.00%
Sampaguita Savings Bank, Inc.	0.00	4,500,000.00	0.00%
Security Bank Savings Corporation	0.00	16,512,938.23	0.00%
Sterling Bank of Asia, Inc.	0.00	5,230,184.85	0.00%
Tong Yang Savings Bank, Inc.	0.00	2,188,040.40	0.00%
Tower Development Bank	0.00	14,571,080.10	0.00%
University Savings Bank, Inc.	0.00	5,311,014.03	0.00%
Village Bank, Inc.	0.00	40,911,220.58	0.00%
Wealth Development Bank Corporation	0.00	3,175,468.29	0.00%
World Partners Bank	0.00	108,369,578.06	0.00%
Allied Savings Bank	0.00	0.00	NA
Bataan Development Bank	0.00	0.00	NA
Bataan Savings and Loan Bank	0.00	0.00	NA
BDO Elite Savings Bank, Inc.	0.00	0.00	NA
BPI Globe BanKO, Inc., A Savings Bank	0.00	0.00	NA
Business and Consumers Bank	0.00	0.00	NA
Card SME Bank, Inc., A Thrift Bank	0.00	0.00	NA
Citibank Savings Inc.	0.00	0.00	NA
City Savings Bank, Inc.	0.00	0.00	NA
Dungganon Bank (A Microfinance Thrift Bank), Inc.	0.00	0.00	NA
Iloilo City Development Bank	0.00	0.00	NA
Merchants Savings and Loan Association, Inc.	0.00	0.00	NA
Metro-Cebu Public Savings Bank	0.00	0.00	NA
Microfinance Maximum Savings Bank, Inc.	0.00	0.00	NA
Northpoint Development Bank, Inc.	0.00	0.00	NA
Optimum Development Bank, Inc.	0.00	0.00	NA
Pacific Ace Savings Bank, Inc.	0.00	0.00	NA
Philippine Resources Savings Banking Corporation	0.00	0.00	NA
Pride Star Development Bank, Inc.	0.00	0.00	NA
Progress Savings and Loan Bank, Inc.	0.00	0.00	NA
Sun Savings Bank, Inc.	0.00	0.00	NA
United Overseas Bank Philippines	0.00	0.00	NA
Grand Total	505,857,819.63	4,546,006,530.54	11.13%

Source: www.bsp.gov.ph