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The Bangko Sentral ng Pilipinas (BSP) said banks will dispose more
than half of their bad assets during the extension of the Special
Purpose Vehicle (SPV) law, which will end on July 14 this year.
“My best estimate is P55 billion [worth of bad
assets],” BSP Deputy Gov. Nestor Ezpenilla Jr. told reporters,
explaining that banks have started to engage in joint ventures and
public auctions to dispose of bad assets.
However, BSP’s estimate is lower than the
projected disposal of $100 billion of bad assets during the
extension of SPV.
In the first two-year implementation of SPV,
which ended in April 2005, total bad assets disposed through SPV
amounted to P93.203 billion, lower than the projected P100 billion.
BSP issued 193 certificates of eligibility (COE) to 33 financial
institutions while two COEs were issued to various financial
institutions for the sale of National Steel Corp.’s non-performing
loans.
In total, banks are estimated to dispose around
P150 billion of bad assets in the four-year implementation of SPV
law.
The law has successfully helped banks reduce
their bad assets that piled up after the Asian economic crisis,
specifically by providing tax incentives
As of end-February this year, the non-performing
loans ratio of universal and commercial banks (U/KBs) settled at
4.70 percent, slightly higher by 0.03 percentage point than the
previous month’s 4.67 percent but favorably lower by 0.83
percentage point than 5.53-percent ratio a year ago.
The real and other properties acquired, gross to
gross assets (GA) ratio was maintained at 3.39 percent from last
month but improved from a year ago’s 3.82-percent ratio.
Non-performing assets (NPA) to GA ratio climbed
to 5.36 percent from last month’s 5.33 percent but eased from year
ago’s 6.19-percent ratio. The increase in the ratio from last
month transpired as NPAs’ 0.03-percent growth came with GAs’
0.46-percent drop. The NPA level at P239.45 billion barely changed
from last month, but was favorably lower than year ago’s P272.01
billion.
-- Maricel E. Burgonio
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