Manila Times

Upholding Truth. Empowering the Philippines
Wednesday, Jul 30, 2025

Philippine Banks' Non-Performing Loan Ratio Increases to Five-Month High

April data reveals a rise in bad loans amid slow economic growth, though year-on-year comparisons show improvements.
Preliminary data from the Bangko Sentral ng Pilipinas (BSP) indicates that the non-performing loan (NPL) ratio of Philippine banks increased to 3.39 percent in April 2023, up from 3.3 percent in March 2023. This level marks the highest ratio observed in five months, coinciding with an economic environment characterized by weak income growth and slowed business activity.

The current NPL ratio of 3.39 percent is the highest since November 2022, when it was recorded at 3.54 percent.

However, this figure represents an improvement compared to the 3.45 percent reported in April 2022.

Experts attribute the rise in NPLs, which are loans that have not been serviced for at least 90 days past their due date, to increasing unemployment rates, leading to diminished earnings growth and consequently impacting borrowers' ability to meet their financial commitments.

Reinielle Matt Erece, an economist at Oikonomia Advisory & Research Inc., noted that diminished demand and lackluster business growth could further complicate cash flow for businesses.

Despite this upward trend in NPLs, there was an eight percent increase in the total amount of bad debts held by banks, amounting to P519.23 billion in April, compared to P480.65 billion in the same month of the previous year.

In contrast, banks experienced a significant rise in loan disbursements, which grew by ten percent to P15.34 trillion from P13.94 trillion year-over-year, a development attributed to the BSP's gradual easing of monetary policy.

Additionally, past due loans, which include a variety of unsettled loan types, rose by 5.7 percent to P653.26 billion in April from P618.04 billion in April 2022, resulting in a past due ratio of 4.26 percent.

The volume of restructured loans, which are accounts modified to prevent default, grew by 7.3 percent to P311.66 billion from P290.37 billion, producing a restructured loan ratio of 2.03 percent.

In response to the increasing ratio of problem loans, banks have augmented their allowance for credit losses by 4.8 percent, reaching P493.79 billion in April, up from P471.35 billion a year earlier.

This adjustment leads to an NPL coverage ratio of 95.1 percent as of the end of April.

Overall, the NPL ratio has remained below four percent since April 2022, as the banking sector retained cautious credit standards.

The NPL ratio in July and August 2022 peaked at a 13-year high of 4.51 percent, a consequence of the economic disruptions triggered by the COVID-19 pandemic.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Hong Kong Reports 12% Surge in Tourist Arrivals in First Half of 2025
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
Thailand and Cambodia prepare for ceasefire talks as clashes intensify
The British propaganda channel BBC News lies again.
Trump: Leaders of Thailand and Cambodia agree to meet for ceasefire talks
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Chinese Firms Urged to Integrate into ASEAN Supply Chains as US Tightens Tariffs on Transshipments
CAMBODIA VS THAILAND: AIR POWER? WHAT AIR POWER?
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Cambodia Fired First: A Minute‑by‑Minute Account From Thailand’s Frontline
Two Peaceful Buddhist Nations Now Trading Airstrikes Over the Hindu Preah Vihear Temple—A 1,100-Year-Old Shrine to Lord Shiva
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
Cambodian forces initiated firefight near Ta Muen Temple in Phanom Dong Rak District, Surin Province
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
Thailand recalls ambassador to Cambodia amid border tensions
Gulf Development Acquires Full Ownership of Pak Lay Hydropower Project in Laos
New Landmine Blast Escalates Thailand–Cambodia Border Tensions
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Switzerland Implements Ban on Mammography Screening
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Thailand to Repatriate Four Orangutans to Indonesia as Diplomatic Gesture
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Cathay Pacific Apologizes After Technical Issues Leave Passengers on Bangkok-Bound Flight Without Air Conditioning
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Superman Franchise Achieves Success with Latest Release
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
China and U.S. Diplomatic Engagement at ASEAN Foreign Ministers' Meeting
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Thailand Launches Workation Paradise Throughout Thailand Season 3
Rubio Assures ASEAN of Preferential Tariff Treatment Amid US Trade Strategy
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Over 600 Myanmar Civilians and Soldiers Flee to Thailand Amid Karen Insurgent Assault
US and China Restart High-Level Dialogue During ASEAN Summit in Kuala Lumpur
Philippines Proposes Tax on Online Gambling Amid Growing Support
×