Banks' NPL ratio rises to 8-month high in July

The Philippine banking sector's nonperforming loan (NPL) ratio rose to an eight-month high in July, Bangko Sentral ng Pilipinas (BSP) data showed.

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Data from the BSP showed banks' gross NPL ratio stood at 3.4% in July, up from 3.34% in June but lower than the 3.58% in the same month last year.

This was the highest bad loan ratio in eight months or since the 3.54% in November 2024.

Loans are considered nonperforming once they are unpaid for at least 90 days after the due date. These are deemed as risk assets since borrowers are unlikely to pay.

The amount of nonperforming loans inched up by 0.97% to P535.45 billion in July from P530.29 billion in June. Bad loans also climbed by 5.38% year on year.

The total loan portfolio of the banking system fell to P15.77 trillion in the first seven months, 0.71% down from the P15.88 trillion at end-June but up 11% from the P14.21 trillion a year earlier.