MANILA, Philippines - The non-performing loan (NPL) ratio of the country's banks eased in November as their total loan portfolio expanded.

According to the Bangko Sentral ng Pilipinas (BSP), the ratio fell by 0.11 percentage point to 3.26% in November from 3.37% in the month before, and by 0.49 percentage point from the previous year's 3.75%.

"This is the fourth consecutive month that the NPL ratio has been below 4%," it said.

NPL ratio represents the share of past due loans to the total loans extended by banks.

The BSP said the decrease in the ratio was due to a 0.19% reduction in bad debts to P85.17 billion from P85.33 billion, and the 3.18% expansion in loans to P2.614 trillion from P2.534 trillion.

Net of interbank loans, the NPL ratio also improved to 3.74% in November from the last month's 3.89% and year ago's 4.15%.

Meantime, the real and other properties acquired (ROPA) to gross assets ratio eased to 2.48% from 2.55%. The drop came from the 0.79% reduction in ROPA to P136.08 billion, and growth in assets.

As a result, the non-performing asset (NPA) ratio improved to 4.04% from 4.16%.

The central bank reported that provisioning against credit losses, or the proportion of reserves set by banks to cover bad debts, strengthened to 109.77% from 106.37%.

Lending up

Bank lending grew 2.6% in November from the year ago on the back of higher loans to productive sectors.

Excluding bank placements with the BSP, lending was up by 6.6%.

The BSP said that loans to the agriculture, real estate and transport sectors rose at double-digit levels, while consumer loan growth was largely steady in the low single digits.

BSP Governor Amando Tetangco Jr. noted that with lending activity gaining momentum, prospects for a self-sustainable economic recovery are improving.

"The BSP remains committed to provide the appropriate monetary conditions to sustain credit expansion, while remaining mindful of its primary mandate of safeguarding price stability," he said.