Borrower struggles fuel NPL rise

Philippine banks' bad loan ratio climbed further to 3.5 percent in the first nine months as borrowers' ability to repay debts weakened due to muted business activities, mainly from climate disruptions and trade setbacks.

- BY DERCO ROSAL

According to the latest data from the Bangko Sentral ng Pilipinas (BSP), the banking industry's nonperforming loan (NPL) ratio worsened further to a nine-month high in August.

The industry's bad loan ratio first rose in July, reaching its highest level in eight months at 3.4 percent. Its continued increase in August, however, remains below the 3.59 percent seen in the same month last year.

The bad loan ratio is the percentage of banks' total loans that are considered nonperforming—meaning the principal or interest is unpaid for at least 90 days after the due date, and are thus deemed at risk of default.