The banking sector witnessed a surge in the bad loan ratio in April, reaching a seven-month high of 3.41 percent.
Data from the Bangko Sentral ng Pilipinas (BSP) showed a consistent increase in the non-performing loan (NPL) ratio since January, primarily attributed to borrowers facing challenges in meeting timely payment obligations.
The situation may exacerbate further due to sudden hikes in payment calculations by banks, particularly credit card issuers.
While the April NPL ratio is lower than the 3.93 percent recorded during the same period last year, it marks the first time it has reached 3.41 percent since October 2022. The total loan portfolio for the industry stood at P12.537 trillion in April, representing a 10 percent increase from P11.393 trillion in 2022.
Soured loans or NPLs amounted to P427.265 billion, reflecting unpaid loans persisting for over 90 days.
However, NPLs have seen a decline of 4.5 percent compared to April 2022, which recorded P447.438 billion.
The past due ratio, or delinquency rate, has also seen a continuous upward trend since January, reaching 4.12 percent in April.
This figure remains lower than the 4.65 percent observed the previous year.
The total value of past due loans declined by 2.5 percent, settling at P516.020 billion compared to P529.301 billion.
Loans are considered past due if payment remains outstanding beyond the due date, although banks may allow a cure period of up to 30 days to enable borrowers to catch up.
In terms of risk coverage, banks’ NPL coverage ratio, representing loan loss reserves, hit its lowest point this year at 103.22 percent in April. However, it still outperforms the figure recorded at the same time in 2022, which stood at 90.6 percent.
