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Banks' bad loans hit 8-month high
Manila Bulletin
|September 6, 2025
Philippine banks are shoring up their loan-loss buffers as the industry's bad loan ratio climbed to an eight-month high of 3.4 percent, due to the lingering impact of the Covid-19 pandemic and global uncertainties affecting borrowers' ability to repay debts.
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According to the latest data from the Bangko Sentral ng Pilipinas (BSP), the banking industry's nonperforming loan (NPL) ratio worsened from the three-month low of 3.34 percent in June. However, it remained 18-basis-points (bps) lower than the 3.58 percent ratio in July last year.
BSP data showed bad loans increased by one percent to P535.4 billion as of end-July from P530.3 billion in June. Year-on-year, soured loans hiked by 5.4 percent from P508.1 billion in July last year.
Loans become nonperforming if unpaid for at least 90 days past due date, posing a credit risk as borrowers are less likely to repay.
This story is from the September 6, 2025 edition of Manila Bulletin.
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