In June 2021, real estate loans grew YoY by 6.1 percent to P2.3 trillion. Banks have also invested in debt and equity securities, the proceeds of which they used to finance real estate activities, although at a smaller magnitude.
Simplifying a great deal, one could say that the forward guidance on short-term interest rates – our stated expectation that the ECB’s key interest rates will remain “at their present levels for an extended period of time” – should be calibrated in a way to anchor the short-to-medium maturities of the yield curve – those portions most sensitive to short-term interest rate expectations and, therefore, to forward guidance – around levels that are sufficiently steady and low.