PH banks' bad loan ratio improves
MANILA, Philippines - Universal and commercial banks' (UKBs) bad loan ratio improved in June, amid an increase in lending, the Bangko Sentral ng Pilipinas said.
The gross non-performing loan (NPL) ratio of UKBs fell to 2.68% in June, improving from 3.01% in the same month a year ago.
"UKBs' soured loans sustain a declining trend amid a rise in lending. This enabled the banks to keep their gross NPL ratio at or below three percent for the tenth straight month," the BSP said.
NPLs are obligations that are unpaid for at least 30 days after the due date.
BSP data showed gross NPLs dropped 1.17% to P100.91 billion in June from P102.1 billion a year ago. Total loans went up by 11% to P3.761 trillion in June from P3.388 trillion a year ago.
Loan loss reserves of UKBs also continued to improve, which translated into higher NPL coverage ratio.
BSP data also showed loan loss reserves went up 3.16% to P131.29 billion in June, translating to an NPL coverage ratio of 130.11% from 124.65% a year ago.
"UKBs also reported generally decreasing NPLs per economic sector. This is evident in the financial intermediation, real estate, manufacturing and wholesale and retail trade sectors, which together received about 63 percent of the banks' (loans)," the BSP said.
"The latest NPL figures indicate the banks' continued efforts to adhere to sound credit risk management systems and to maintain high loan quality. These are essential to sustaining the viability of individual banks and to maintaining the overall stability of the domestic financial system," it added.