The BSP said the banks’ non-performing loans rose by 2.9 percent to P290 billion in January from P281.9 billion in December last year, while the industry’s total loan portfolio fell by 2.5 percent to P1.585 trillion from P1.6251 trillion a month ago.
Thirty of the country’s 44 commercial banks reported higher NPL ratios compared to just 14 in December.
Moreover, 17 banks exceeded the industry ratio, the BSP said without naming these banks.
The BSP said the incremental NPLs of private domestic expanded commercial banks at P8 billion, contributed largely to the 2.9-percent or P8.1-billion rise in bad loans.
It also noted that except for government banks, all other groups posted loan cuts totaling P62.6 billion with local commercial banks accounting for the bulk at P40.3 billion; foreign branches, P10.8 billion; and other private commercial banks, P11.5 billion.
During the period, it was also noted that all other banking sectors, except for government banks whose NPL ratio improved to 16.67 percent, registered an increase in bad loan ratio with other private commercial banks recording the highest at 23.29 percent.
Another factor that led to the increase in soured loans is the lower loan-loss reserves which contracted by 0.6 percent, or P767 million, from P127.4 billion to P126.6 billion.
Aside from NPLs, total bank holdings of repossesed real property or other collateral fell by 0.3 percent to P158 billion.
Analysts said banks’ heavy exposure in the real estate sector led to the rise in their NPL ratios, especially at the height of the Asian financial crisis in 1997.
Congress and President Arroyo agreed to pass by June a "Special Purpose Asset Vehicle Act" to clear the P8.8 billion in non-performing assets from the banks’ books to enable them to resume normal lending.
The proposed law would create asset-management companies to buy the NPLs as well as create a mechanism to enable foreign investors to skirt a constitutional provision banning foreign entities from owning real estate in the Philippines.