Banks’ bad loans hit P82.88 billion as of end-July

MANILA, Philippines – The non-performing loan (NPL) ratio of universal and commercial banks rose slightly to 3.49 percent in July from the previous month’s 3.36 percent, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

The BSP attributed the month-on-month increase in the NPL ratio to the bigger drop in banks’ total loan portfolio which outweighed the drop in banks’ actual bad loans. Bank’s bad loans dropped to P82.88 billion as of end July from P84.62 billion a month ago.

Nevertheless, the BSP said the 3.49 percent NPL ratio in July was still an improvement from the four percent ratio recorded in the same period last year.

“This is the 10 consecutive month that the NPL ratio has been below four percent,” the BSP also noted.

The banking sector’s total loan portfolio declined to P2.376 trillion in July from P2.518 trillion a month ago.

Net of interbank loans (IBL), the NPL ratio also rose to 3.99 percent from the previous month’s 3.79 percent but eased from the year-ago level of 4.59 percent.

The BSP said the ratio went up from the June level as the drop in NPLs was outmatched by the 6.96 percent contraction in regular loans to P2.076 trillion.

Banks’ real and other properties acquired (ROPA) to gross assets (GA) ratio went up to 2.72 percent from the previous month’s 2.70 percent.

However, the BSP said this was an improvement compared to the year-ago ratio of 3.16 percent.

The month-on-month increase in the ratio came about as the 0.78 percent drop in ROPA to P139.75 billion was surpassed by the larger decline in GAs.

The non-performing assets (NPAs) to GA ratio rose to 4.35 percent from last month’s 4.33 percent but improved from the year-ago ratio of 5.16.

The BSP attributed the increase in the ratio to the 1.56 percent drop in gross assets, which outweighed the 1.26 percent reduction in NPAs.

The NPA level stood at P222.63 billion, down from the previous month’s

P225.47 billion and the year-ago level of P239.93 billion.

The restructured loans (RLs) to TLP ratio climbed to 2 percent from the previous month’s 1.82 percent but fell from the year-ago ratio of 2.50 percent. The increase in the ratio from the previous month was driven by the 3.84 percent growth in gross RLs to P47.93 billion. –Iris C. Gonzales (The Philippine Star)