THE collective nonperforming loan (NPL) ratio of Philippine banks edged down in November from the two-year high recorded a month earlier, data from the Bangko Sentral ng Pilipinas (BSP) showed.
The bad loan ratio, which covers past-due loans where the principal or interest is unpaid for 90 days or more after the due date, eased to 3.54 percent from October’s 3.6 percent. It was, however, still higher than the year-earlier 3.41 percent.
Past-due loans rose to P635.62 billion from P563.38 billion a year ago. These accounted for 4.32 percent of total loans, up from 4.22 percent year on year but lower than the 4.4 percent in October.
Restructured loans, meanwhile, rose to P293.7 billion from P294.53 billion a month earlier and comprised 2.0 percent of the banks’ gross loan portfolio.
A year earlier, restructured loans were higher at P305.81 billion.
Lenders’ loan loss reserves increased to P485.13 billion, equivalent to 3.30 percent of total loans. This was, however, lower than the 3.46 percent seen a year ago.
The NPL coverage ratio, which indicates the banks’ allowances for potential losses, was also lower at 93.2 percent from 101.47 percent a year earlier.
Sought for comment, Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the slight easing could be attributed to “improved loan quality and better debt management by banks.”
“However, the year-on-year increase suggests that economic challenges and higher interest rates might have impacted borrowers’ ability to repay loans,” he added.
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