Large Philippine banks remain relatively stable in their lending operations, with an average non-performing loan ratio of below 3 percent in line with international standards, but some smaller banks engaged in consumer lending have bad loans as high as 60 percent of loan portfolio.
A government-owned thrift bank recorded an NPL ratio of 68.01 percent as of June 2011 while a Cebu-based savings bank had an NPL ratio of 60.82 percent during the same period, according to separate reports submitted by the two banks to the Bangko Sentral.
There were 72 consumer or thrift banks in the Philippines, with an average NPL ratio of only 6.56 percent as of March 2011, but a few of them such as the government-owned GSIS Family Bank and Metro Cebu Public Savings Bank based in Talisay, Cebu had delinquent loans representing more than half of their total loan portfolio.
Other thrift banks with NPL ratio higher than 20 percent as of June 2011 were Quezon City-based Real Bank, with 40.7 percent; San Pedo, Laguna-based Northpoint Development Bank, 36.51 percent; Subic Bay Freeport-based Pacific Ace Savings Bank, 29.39 percent; Pangasinan-based Malasiqui Progressive SLB, 27.7 percent; Citibank Savings Inc., 24.54 percent; Balanga, Bataan-based Bataan Development Bank, 23.86 percent; Bocaue, Bulacan-based Farmers Savings & Loan Bank, 22.48 percent; and the Lemery, Batangas-based Lemery Savings & Loan Bank, 21.74 percent.
NPLs or delinquent loans refer to past due loan accounts whose principal or interest were unpaid for 30 days or more after their due date. Banks with high NPL ratio suffer from liquidity problems that affect their operations. Roderick T. dela Cruz, Manila Standard Today
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