BSP: Universal, commercial banks’ NPL stay low at 2.6%

CEBU, Philippines - The Bangko Sentral ng Pilipinas (BSP) announced its sustained monitoring on the Non-Performing Loans (NPL) and Total Loan Portfolio (TPL) movements in the country's universal and commercial banks (U/KBs).

The Philippines' U/KBs kept their gross NPL low at 2.6 percent of total loan portfolio (TPL) in September this year.

The gross NPL ratio stayed low amid a year-on-year decline in soared loans and the continued rise in lending.

BSP report showed that U/KBS posted P102.09 billion in NPLs in September, lower than the P103.42 billion recorded a year earlier. The bank's TLP, meanwhile, increased to P3.92 trillion in September from P3.44 trillion during the same month last year.

According to BSP, the industry also continued to set aside substantial reserves for potential credit losses as U/KBs provisioned for 128.80 percent of their gross NPLs in September.

Aside from the gross NPLs, which are the actual level of NPls, the BSP also monitors the NPLs net of specific allowances for potential credit losses.

The net NPLs of U/KBs also maintained low at 0.45 percent of TPL in September.

The U/KBs NPL levels also continue to remain low across economic sectors. This is seen in the financial intermediation, real estate, manufacturing and wholesale  and retail trade sectors which together accounted for 62.8 percent of the bank's TLP in  September.

Low NPL ratios and robust loan loss provisioning indicate prudent management of credit risks. /JOB (FREEMAN)