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THE share of bad or nonperforming loans in banks’ total loan
portfolio at end-December eased further to approximate pre-Asian
financial crisis levels, the Bangko Sentral ng Pilipinas said.
Deputy Governor Nestor A. Espenilla Jr. said the
NPL ratio of universal and commercial banks (U/KBs) stood at 4.45
percent, an improvement from previous month’s 4.99 percent and
1.21-percentage point better than in the same period last year.
The banks’ December NPLs showed the lowest
recorded ratio since 1998.
Espenilla said: “It will continue to stay well
below 5 throughout the year; we have to watch out if it will breach
4 percent by end-year. That’s happening because of significant
reductions in stock and continued pick up of loans, so both the
denominator and nominator are kicking in to lower rapidly the NPL
ratio.”
The month-on-month improvement took place with
NPLs declining 7.26 percent as a result of the 4.12-percent
expansion in the total loan portfolio.
Bangko Sentral said this development was also
driven by the 5.67-percent contraction in NPLs, adding the industry
was able to sustain a single-digit NPL ratio for the past 33 months.
NPLs favorably dropped to P97.63 billion from
the previous month’s P105.28 billion, while total loan portfolio
expanded to P2.2 trillion from P2.11 trillion.
The NPL ratio of net interbank loans also eased
to 5.27 percent from last month’s 5.87 percent and last year’s
7.03 percent ratios. The improvement from last month transpired as
the decline in NPLs was accompanied by the 3.32-percent growth in
regular loans to P1.85 trillion.
In a statement, the central bank also reported
that at end-December thrift banking industry’s NPL ratio stood at
6.87 percent, easing by 0.05 percentage point from the previous
month’s 6.92 percent and by 1.38 percentage point from the same
period last year’s 8.25 percent.
Exclusive of interbank loans, the sector’s
ratio at 8.17 percent, an improvement from end-November 8.77 percent
as core lending increased 1.28 percent to P247.67 billion.
-- Chino S. Leyco
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