Banks' NPL ratio eases to six-month low in September

THE PHILIPPINE BANKING sector's gross nonperforming loan (NPL) ratio eased to a six-month low in September, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

- By Katherine K. Chan

The banking industry's gross NPL ratio slid to 3.31% in September from 3.5% in August and 3.47% in the same month last year. This was the lowest bad loan ratio in six months or since the 3.3% logged in March.

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

Based on preliminary BSP data, banks' soured loans slipped by 2.1% to P538.661 billion in September from P550.095 billion in August.

Year on year, it increased by 4.1% from P517.453 billion.

The total loan portfolio of Philippine banks reached P16.263 trillion in September, climbing by 3.5% from P15.709 trillion in August and by 9.1% from P14.904 trillion last year.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said Philippine banks' bad loans declined as September had less weather disruptions.