In November 2023, Philippine banks saw a decrease in the gross non-performing loans (NPL) ratio to 3.41%, down from the previous month’s 3.44%. Although higher than the 3.35% in November 2022, it marked an improvement from October 2023’s 3.44%.
Non-performing loans, representing unpaid principal or interest overdue by 30 days or more, fluctuated throughout the year as borrowers faced challenges in meeting payments.
As of end-November, total NPLs amounted to P454.28 billion, an 11.31% increase from the same period in 2022. The overall industry loan portfolio rose to P13.336 trillion, up 9.32% from the same period in 2022.
The past due ratio dropped to 4.22% in November, down from October’s 4.26% but higher than the previous year’s 4.04%. Total past due loans increased by 14.38% to P563.384 billion from P492.528 billion in 2022.
BSP regulations require allowances for credit losses based on the duration of missed payments. The NPL coverage ratio was 101.47% in November, down from October but higher than the same period in 2022. Banks allocated P460.952 billion for loan loss provisioning, a 6.82% increase from 2022.
Gross restructured loans, aimed at assisting problematic borrowers, totaled P305.81 billion in November, down 6.69% from the same period in 2022. The restructured loans to the total gross loan portfolio ratio was 2.29%, lower than October and 2022.
The BSP remains optimistic about manageable NPLs, crediting banks’ prudent practices. The industry, with a stable balance sheet, profitable operations, and sufficient buffers, is deemed strong.
In the first half of 2023, banks invested P6.6 trillion, a 9.2% YoY increase, to boost the financial system’s growth. Despite challenges like high inflation, the BSP asserts the resilience of the domestic financial system in meeting the country’s financing needs.
