Rural, coop, thrift banks account for 13% of Phl's banking loan portfolio

CEBU, Philippines - The rural, thrift and cooperative banking system in the Philippines identified real estate, agriculture, wholesale and retail trade and financial intermediation, as well as individuals who use the loans for consumption, as top loan takers as of September of last year.

Latest record from the Banko Sentral ng Pilipinas (BSP) revealed that the total loan portfolio (TPL) of rural banks (RBs), thrift banks (TBs) and cooperative banks represented 13.60 percent of the P4.54 trillion gross TPL of the Philippine banking system as of September of 2013.

The non-performing loans (NPLs) of these banks stood at 7.33 percent of their total TPL of  P617.49 billion in the same reference period.

The banks' NPL ratio remained practically unchanged from the 7.32 percent registered in the second quarter of last year. The banks' TPL, meanwhile, grew by 14.50 percent in September 2013 from the P539.29 billion posted in the same period a year earlier.

Meanwhile, the banks' loan loss reserves stood at 66.10 percent of  NPLs as of end of September last year, which shows that the industry continues to set aside substantial reserves for potential credit losses.

TBs posted a 5.89- percent gross NPL ratio in September, lower than the 6.29 percent registered a year ago. RBs loan loss reserves for NPLs decreased to 57.78 percent in September from 59.36 percent a year earlier.

Cooperative banks' gross NPL ratio declined to 12.74 in September from 13.42 percent a year ago, while their loan loss provisioning increased to 79.60 percent of  NPLs from 7.075 percent during the same period.

The latest NPL figures indicate the banks' continued efforts to adhere to sound credit risk management systems and to maintain high loan quality.

BSP said these are essential to sustaining the viability of individual banks and to maintaining the overall stability of the domestic financial system.

The central bank said it would continuously oversee Philippine banks' loan system to ensure that they have enough reserves to withstand loss from nonperforming loans.

"The Bangko Sentral ng Pilipinas continues to proactively monitor the nonperforming loans of various segments of the banking sector to ensure that credit-underwriting standards remain high in a low interest-rate environment," the central bank said. — (FREEMAN)