The Philippines: Banks’ bad loans ratio eases to 6-month low

• The asset quality of Philippine banks improved for the second straight month in Oct 21 as the industry’s gross non-performing loan (NPL) ratio eased to a six-month low of 4.42% from the revised 4.44% in Sep 21, according to the Bangko Sentral ng Pilipinas (BSP).
• The banking sector’s NPL ratio has been declining after hitting a 13-year high of 4.51% in Jul 21 and Aug 21 as credit growth continued to pick up amid the gradual reopening of the economy and further easing of COVID lockdown measures.
• Preliminary data from the central bank showed the gross NPL ratio of the banking industry in Oct 21 was the lowest since the 4.35% recorded in Apr 21.
• As of end-Oct 21, past due loans, or those loans left unsettled beyond payment date, recorded a double-digit increase of 10.3% y/y to PHP565.78bn from PHP512.89bn a year ago, resulting in past due ratio of 5.16%.
• Likewise, the industry’s restructured loans amounted to PHP337.82bn in Oct 21 or 2.5 times the PHP137.08bn recorded in the same month 2020, translating to a restructured loan ratio of 3.08%.
• Meanwhile, the industry’s non-performing assets grew by +18.5% to PHP602.51bn from PHP508.41bn, resulting in an NPA to gross asset ratio of 2.94%.

External Link : https://www.philstar.com/business/2021/12/11/2147116/banks-bad-loans-ratio-eases-6-month-low