Bad debt ratio improves to 4.08% in March – Manila Bulletin

Banks’ non-performing loan (NPL) ratio fell to 4.08% at the end of the first quarter, its lowest since December 2021, based on data from Bangko Sentral ng Pilipinas (BSP).

The ratio of bad loans in March was lower than the 4.24% at the end of February and the 4.21% of the same period in 2021.

bank loans

PNPs are loans past due for more than 90 days and are considered impaired loan accounts. NPLs on an annual basis edged up 2.67% to 460.46 billion pesos from 448.44 billion pesos, but fell 2.58% from 472.66 billion pesos at the end of February.

The sector’s total loan portfolio in the first quarter increased by 5.82% to reach 11,280 billion pesos against 10,660 billion pesos in the same period of 2021.

Meanwhile, the delinquency rate of banks, which is the delinquency rate, also fell to 4.83% in March, from 5% at the end of February and 5.34% at the same period in 2021.

Delinquent bank loans decreased by 4.39% to P544.59 billion from P569.64 billion last year. It was also down from 557.96 billion pesos at the end of February. Loan accounts are considered overdue if they are not paid by the due dates, but banks may provide a 30-day relief period to allow borrowers to catch up.

Based on BSP data, the sector’s NPL coverage rate stood at 88.38%. This figure was higher than the 86.12% at the end of February and the 83.24% in March 2021.

Banks’ provision for credit losses increased by 9% to 406.97 billion pesos from 373.28 billion pesos in 2021. The provision for credit losses has increased since 2020 to cover loan losses due to blockages extended from the pandemic and following the two Bayanihan laws.

The 45 commercial and universal banks represented the lion’s share of the capital of the banking systems with 92-95%.

At the end of March, the major banks’ NPL ratio also improved to 3.73%, as reported on Monday, May 16.

Large banks’ NPLs increased to 394.63 billion pesos, up 9 percent from the same period last year of 362.04 billion pesos. Compared to 405.68 billion pesos at the end of February, the gross NPLs of major banks improved by 2.72%, according to data from the BSP.

The NPL coverage ratio of major lenders was higher at 92.20% compared to 89.72% at the end of February and 89.97% at the same period last year. Provision for credit losses remained virtually unchanged at 363.85 billion pesos from 363.98 billion pesos the previous month, but higher than the same period last year by 325.73 billion pesos.

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Sallie R. Loera