Banks’ bad loans hit 8-month high

Creased by 2.6 percent to P687.6 billion as of July from P670.5 billion a month ago.

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It also increased by 9.9 percent from P625.7 billion in the previous year.

This brought the past due ratio to 4.36 percent, marking the highest record in nine months, or since the 4.4 percent in October last year, which was also the ratio in July a year ago.

Past due loans are those where the borrower has failed to pay principal, interest, or any installment on time, including restructured loans and other financial assets.

Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., said the uptick in the bad loan ratio shows that some sectors, particularly small and medium enterprises (SMEs) and consumer borrowers, are still struggling.

Ravelas noted that many households and firms are adjusting after the pandemic, while global uncertainties such as United States (US) tariffs have also caused growth slowdown globally.