June 24, 2022

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Banks’ NPL ratio hits 3-month high

2 min read

By Luz Wendy T. Noble, Reporter

PHILIPPINE BANKS saw an uptick in bad loans in February, reflecting the challenges that many borrowers still face in repaying their debt despite the gradual reopening of the economy.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the gross nonperforming loan (NPL) ratio of the Philippine banking industry increased to 4.24% in February from 4.14% in January. 

The NPL ratio also picked up from the 4.08% a year earlier and is the highest since the 4.35% seen in November.

Bad loans in February increased by 2.38% to P472.664 billion from P461.66 billion in January. This was also 9.6% higher than the P431.266 billion worth of bad loans a year earlier.

In February, banks’ gross loan portfolio rose by 5.4% to P11.15 trillion from P10.579 trillion in the same month a year ago. It inched up by 0.07% from the P11.142 trillion in January.

“The recent pickup in NPL ratio underscores the challenges faced by the economy despite the progressive reopening of the economy,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail. 

Metro Manila and some provinces were placed under Alert Level 3 in January due to the Omicron-driven surge in coronavirus disease 2019 (COVID-19) infections. Restrictions have since been relaxed to the most lenient Alert Level 1 as the number of COVID-19 cases dropped.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message said corporate borrowers as well as consumers are likely already feeling the pinch as borrowing costs rose in recent months.

“[This] further impaired the ability to pay of some borrowers,” he said.

Past due loans held by lenders rose by 1.17% to P557.964 billion from P551.472 billion in the same month last year. These made up 5% of borrowings, down from 5.21% a year earlier.

Meanwhile, restructured loans amounted to P344.081 billion, climbing by 71.2% year on year from P200.986 billion. This brought its ratio higher to…

Neil

2022-04-06 12:34:28

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