Soured loans drop

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Big banks’ soured loans eased slightly in September even if banks increase their lending substantially during the period.

Figures released by the Bangko Sentral ng Pilipinas (BSP) on Tuesday showed gross non-performing loans (NPL) at universal and commercial banks (U/KBs) by the end of September stood at P96.18 billion, down from P101.20 billion in August.

Year-on-year, bad loans also went down from P100.64 billion recorded during the same month a year earlier.

The central bank noted that the NPL levels remained low across economic sectors during the month. These sectors include financial intermediation; real estate, renting and business activities; manufacturing; wholesale and retail trade; and electricity, gas and water supply; which together accounted for 71.3 percent of the industry’s TLP during the period.


The banks’ total loan portfolio in September increased to P4.70 trillion from the P4.59 trillion in August and the P3.92 trillion a year ago.

Meanwhile, banks’ NPL ratio stood at 2.04 percent in September, easing from the 2.21 percent in August and the 2.57 percent a year ago.

The central bank also reported that banks’ loan loss reserves (LLR) for potential credit losses continued to surpass their bad loans. In September, banks’ LLR stood at 139.02 percent of their gross NPLs, up from the 133.95 posted in August

“The Bangko Sentral ng Pilipinas continues to keep track of the loan quality of U/KBs in line with its supervisory efforts to foster high credit standards. This is essential to BSP’s policy objective of fostering financial stability,” it stated.

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