BSP sets new property price index
The central bank is requiring banks to submit a quarterly report on appraised commercial properties (QRACP) to be used for its price monitoring of commercial real estate.
The Bangko Sentral ng Pilipinas (BSP), in a new memo or Circular No. 1102, said the QRACP will be the groundwork to generate a new commercial property price index or CPPI to complement the existing residential real estate price index (RREPI).
The circular directed both commercial banks and thrift banks to submit the QRACP for the new price monitoring index .“To generate a CPPI, a complementary indicator to the RREPI, all universal/commercial banks and thrift banks on solo basis (head office and branches/other offices) shall submit (a QRACP) to the BSP. (The QRACP) is necessary to generate a CPPI on a quarterly basis and address the need for a more comprehensive measure of real property prices in the Philippines,” according to the circular that was signed on October 19 by BSP Governor Benjamin E. Diokno.
The collected information from banks based on the commercial property report will “serve as valuable inputs in the formulation of BSP policies.”
The QRACP covers all appraised commercial properties which include property accepted as collateral in lending transactions and acquired asset in the settlement of loans, the circular said.
The RREPI was introduced in 2016. It measures the average price changes of housing units such as condominium units, single detached/attached houses, duplexes and townhouses. It is based on banks’ quarterly report on all residential real estate loans.
Similar with RREPI, the CPPI will help the BSP assess the country’s real estate and credit market conditions.
As of the second quarter, RREPI increased by 27.1 percent year-on-year and it was the highest growth rate recorded since 2016. Residential property prices went up because of increased demand for high-end projects and the higher marketing costs of appraised premium properties.
(source: Manila Bulletin)