Banks' bad loans ratio worsens

Climbs to 5-month high in April

- By KEISHA TA-ASAN

The proportion of soured loans in the banking system rose to its highest level in five months in April, driven by weak income growth and slower business activity.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that the non-performing loan (NPL) ratio of banks rose to 3.39 percent in April from 3.3 percent in March.

This was the highest level since November 2024, when the NPL ratio stood at 3.54 percent. Still, it was lower than the 3.45 percent recorded in April last year.

Reinielle Matt Erece, an economist at Oikonomia Advisory & Research Inc., said that higher unemployment in the past few months could indicate slower earnings growth, making it harder for borrowers to pay their loans.