MANILA: Soured loans held by local banks rose to a two-month high in January, opening the year on a negative note as the lingering impact of the last pandemic and the slow interest rate-cutting cycle weighed on borrowers’ ability to settle their obligations on time.
Latest data from the Bangko Sentral ng Pilipinas showed that the gross amount of non-performing loans (NPLs) – or borrowings that remain unpaid 90 days past the due date and at risk of default – accounted for 3.38% of the industry’s total lending portfolio.
That figure, known as the gross NPL ratio, was higher than the 3.27% recorded in December. Data showed this was the highest ratio of bad loans to total credit since November 2024’s 3.54%.
This means 512.83 billion Philippine peso of the domestic banking sector’s 15.18-trillion-peso loan portfolio had turned sour in January. That amount of NPLs was 11.3% bigger compared with a year ago.
Jonathan Ravelas, senior adviser at Reyes Tacandong & Co, said the latest results showed how borrowers continued to feel the economic impact of the Covid-19 pandemic, which was worsened by the recent bout of high inflation. — Philippine Daily Inquirer/ANN
