Philippines keeps an eye on real estate loans

As loan growth seemingly cools down to 15%.

According to DBS, the central bank (BSP) is likely to keep the overnight borrowing rate (OBR) at a record low of 3.5% tomorrow.

Here's more from DBS:

BSP is on balance more concerned about capital inflows in the immediate term and this was what prompted the recent cut 25bps rate cut in October.

However, further rate cuts may risk domestic macroeconomic stability further down the line. At this point, economic growth is still robust, with 3Q growth coming in at 7.1% YoY.

Loan growth also appears to be stabilizing at around 15%. With headline inflation still staying benign, BSP can keep rates accommodative, but further rate cuts appear unlikely.

Moreover, BSP has already stated that it is keeping a watch on real estate loans. Several new measures have been considered to help moderate inflows and temper peso strength.

These include curbs on NDFs and setting a minimum holding period for securities. Beyond the short term, inflationary pressures are likely to materialize and monetary tightening is likely to take place in 4Q13.