Licenses, registrations of 401 lending firms canceled – SEC

The Securities and Exchange Commission (SEC) on Monday said that it had canceled the registrations and licenses of 401 lending companies over their failure to comply with reportorial requirements.

The revocation order was issued last May 30 by the corporate regulator's Financing and Lending Companies Department.

"The subject companies were found to have failed to file their audited financial statements, general information sheet, director or trustee compensation report, and director or trustee appraisal or performance report and the standards or criteria for the assessment," the SEC said in a statement.

All companies had failed to file the required reports at least three times over a five-year period and were declared delinquent after ignoring an October 2023 notice to avail of an amnesty.

Delinquent firms were given another six months to comply but all respondents again failed to do so, the SEC said.

Under SEC Memorandum Circular 19, series of 2023, failure to comply within six months from the receipt of the order of delinquency authorizes the commission to revoke corporate registrations.

The list of lending companies that had their primary and secondary licenses revoked can be accessed at https://www.sec.gov.ph/wp-content/uploads/2025/06/2025Advisories_401-Delinquent-Lending-Companies_Order.pdf.

Source: Manila Times

Real estate risks need closer scrutiny

Even as the Philippine banking system has remained resilient, the International Monetary Fund (IMF) said risks in the real estate sector and consumer credit still require closer monitoring and could prompt the central bank to intervene.

“Financial stability risks remain contained. The banking system has sufficient liquidity and capital buffers, and nonperforming loans (NPL) are low,” an IMF spokesperson said.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the banking industry’s NPL ratio eased to a three-month low of 3.3% in March.

“However, parts of the commercial real estate sector have seen persistently high vacancies and falling rents, and NPLs for housing loans remain elevated,” the IMF said.

Property consultant Colliers Philippines expects the vacancy rate for residential property in Metro Manila to hit 26% by yearend, while office vacancies are projected at 22% this year amid condominium oversupply and slow take-up of unsold units.

The BSP in its latest Financial Stability Report noted the “rising NPLs in the real estate sector.”

The NPL ratio for residential real estate was at 6.82%, while commercial real estate NPLs were 2.18% as of September 2024. The bulk (62.5%) of the real estate loan portfolio consists mostly of commercial loans.

The BSP also earlier said the mid- and low-cost housing segments, which account for a large part of residential real estate loans, have driven the rise in NPLs.

Consumer loans are also another area that the BSP needs to keep an eye on, the IMF said.

“The rapid growth in consumer credit, though a relatively small portion of banking assets, warrants close monitoring,” it said.

BSP data showed outstanding loans of universal and commercial banks rose by 11.8% to P13.19 trillion in March from a year ago.

Consumer loans to residents increased by 23.6% in March to P1.64 trillion, mainly due to the 28.8% jump in credit card loans to P959.43 billion.

The central bank must also be prepared to step in, when necessary, the multilateral institution said.

“The BSP should be ready to adjust macroprudential policy in line with developments in the financial cycle to preempt the buildup of vulnerabilities,” the IMF said.

In the same Financial Stability Report, the BSP said that the financial system’s real estate loan exposure will require “closer monitoring amid evolving market conditions.”

Banks’ real estate exposure ratio rose to 19.75% as of end-December from 19.55% at end-September.

This as total investments and loans extended by Philippine banks and trust departments to the real estate sector grew by 5% to P3.31 trillion as of end-December from P3.15 trillion in 2023.

The BSP monitors lenders’ exposure to the real estate industry as part of its mandate to maintain financial stability.

Source: Business World

Expanding financial access for every Filipino

Economic uncertainties have pushed more Filipinos to consider financial safety nets, yet achieving long-term security remains a challenge.

A 2024 industry report found that 43% of Filipinos are seeking passive income sources, 39% are prioritizing emergency savings, and 32% are focused on financial freedom after retirement. However, major hurdles remain, with rising healthcare costs at 82%, inflation at 81%, and concerns over economic slowdown and recession at 78% weighing heavily on financial decisions.

Despite the availability of banking services, many Filipinos still prefer keeping their savings in traditional piggy banks, bamboo containers, or old jars. A study published by PANTAO: An International Journal of the Humanities and Social Sciences noted that distrust in banks stems from fears of bankruptcy or inflation eroding their savings.

However, keeping cash at home poses greater risks, including theft, damage, or misplacement.

The study emphasized that banks serve not only as safekeeping institutions but also as tools for emergency preparedness. Experts recommend maintaining at least three to six months’ worth of living expenses in a secure, accessible account to prevent unnecessary debt during financial emergencies. When emergencies arise, those without savings often turn to quick loans, credit cards, or informal borrowing, creating a cycle where a large portion of income goes toward debt repayment rather than wealth-building.

Risk management is another overlooked aspect of personal finance. Many Filipinos see insurance as an unnecessary expense rather than a safeguard against life’s uncertainties. Life insurance, for example, is often dismissed as a luxury for the wealthy, while non-life insurance is viewed as an added cost rather than protection for assets.

While the country’s insurance penetration improved by 0.06 percentage points in the fourth quarter of 2024 to 1.67%, it remains relatively low compared to the global average of 2.9% and 2.2% in emerging Asia.

According to a JP Morgan report, life insurance with cash value can be a valuable financial tool for asset diversification. Permanent life insurance policies, for instance, include savings components that can grow over time, offering additional financial security.

Investment as wealth-building tool

According to the Bangko Sentral ng Pilipinas (BSP), saving is essential for financial security as it provides readily available funds for emergencies and short-term needs. However, these accounts offer minimal returns and often fail to keep pace with inflation.

Investing, on the other hand, involves purchasing assets that can appreciate over time, with the potential to generate higher returns. The BSP stated that income is a person’s most powerful wealth-building tool. Without strategic investing, hard-earned money may not reach its full potential.

While investments carry risks, they also provide opportunities for financial growth, helping Filipinos move beyond mere survival toward true financial independence. Middle-income Filipinos are exploring investment opportunities to grow their wealth, including stocks, mutual funds, real estate, and digital assets.

Such investors are typically investing to prioritize specific life objectives such as homeownership, education funding, or retirement planning. For them, the goal is not just wealth accumulation but securing a future that can withstand economic uncertainties.

Beyond financial gains, focusing on long-term objectives means investors are less likely to make impulsive decisions driven by short-term market fluctuations. This method helps to break away from the traditional approach of a one-size-fits-all investment solution.

However, 75% of Filipinos still do not invest, according to the BSP Financial Inclusion Survey. Many hesitate to enter the investment space due to a lack of knowledge, fear of risk, or unfamiliarity with financial products. The central bank also reported that the lack of financial literacy discourages people from considering investments, as many view them as risky or exclusive to the wealthy.

Journey towards financial inclusion

The BSP said that many Filipinos remain outside the formal financial system, unable to maximize opportunities that could improve their financial standing.

While women in the Philippines have higher financial inclusion rates than men, large segments of the population still struggle to access financial services. Those most affected include low-income earners, senior citizens, migrant workers and their families, persons with disabilities, indigenous peoples, and forcibly displaced persons.

Micro, small, and medium enterprises (MSMEs), along with agriculture-based businesses, also remain largely underserved. These sectors contribute significantly to employment and economic activity yet receive only a small fraction of total bank loans.

Smallholder farmers, fisherfolk, and informal workers, in particular, face limited access to financing that constrain their ability to expand and improve their livelihoods.

The transition to digital transactions has also introduced new challenges, especially in rural areas where internet connectivity is inconsistent and financial literacy is lower. Many Filipinos remain hesitant to fully embrace digital banking due to concerns about affordability, security, and fraud risks.

In response, the central bank is intensifying efforts to educate Filipinos on key financial concepts through its Economic and Financial Learning Office. The Economic and Financial Learning Program regularly holds activities designed to improve public understanding of essential financial matters.

Recognizing the challenges MSMEs and the agriculture sector face in securing financing, the BSP is promoting alternative lending solutions through Agricultural Value Chain Financing model, which connects agribusiness players with banks to facilitate lending opportunities. Through Circular No. 908, the central bank encourages banks to explore value chain financing as a sustainable way to support the agriculture industry.

In addition, the BSP continues to promote the Credit Surety Fund, which provides collateral substitutes to MSMEs, enabling them to access bank loans. Under the Credit Surety Fund (CSF) Cooperative Act, the central bank works closely with cooperatives and the Cooperative Development Authority to strengthen CSFs in various communities.

Meanwhile, the Department of Finance (DoF) has called on the insurance industry to expand market penetration and position insurance as a mainstream financial instrument and basic necessity for Filipinos.

In a statement, Finance Secretary Ralph G. Recto emphasized that insurance is a powerful tool for poverty reduction and long-term financial security, more than just a safety net.

“Risk is a significant driver of poverty, and adequate insurance coverage is among the powerful tools for mitigating this challenge. Therefore, the life insurance industry [must] hold key positions in winning our battle against poverty,” said Mr. Recto.

The Finance secretary also urged industry players to embrace digital innovation, simplify policies, and develop customer-centric, cost-effective solutions. That way, insurance serves as a comprehensive financial product that integrates protection, savings, and investment benefits tailored to different life stages.

Source: Business World