Banks’ bad loans swell in 11 months of 2021

Non-performing loans held by Philippine banks continued to pick up in January to November last year, reflecting the need for the government to put the economy on a firmer footing.

Most of the banks are controlled by the country’s bilyonaryo families. These include BDO and China Bank of the Sys, Ty-led Metropolitan Bank & Trust Co., Philippine National Bank of tobacco and airline tycoon Lucio Tan, Yuchengcos’ Rizal Commercial Banking Corp. (RCBC), UnionBank of the Aboitizes, Gotianun-led EastWest Bank, San Miguel Corp.’s Bank of Commerce, and Gokongweis’ Robinsons Bank.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the industry’s soured loans rose 19.1 percent to P481.88 billion during the 11-month period while its loan book went up by only 4.3 percent to P11.08 trillion.

Past due loans or loans left unsettled beyond payment date climbed 7.9 percent to P567.51 billion while restructured loans ballooned to P344.89 billion or more than double the P139.61 billion booked in the same period in 2020.

The central bank sees the industry’s NPL ratio peaking at 8.2 percent this year from a range of five to six percent last year.