THE nonperforming loan (NPL) ratio of Philippine banks hit a three-month low of 3.29 percent in March, according to data from the Bangko Sentral ng Pilipinas (BSP).
NPL or bad loan ratio — which covers past-due debts whose principal or interest is unpaid for 90 days or more — dropped from February’s six-month high of 3.33 percent and was slightly lower than the year-earlier 3.30 percent.
It was the lowest recorded bad-loan ratio since the 3.07 percent in December 2025.
Soured loans — which rose to P568.55 billion in March from P553.68 billion a month earlier — were significantly higher than the P516.12 billion a year ago.
Similarly, past-due loans piled up to P736.18 billion from P715.66 billion in February and P646.37 billion in March 2025. These accounted for 4.26 percent of total loans, down from 4.31 percent in February but higher than the 4.14 percent last year.
Restructured loans also climbed to P338.39 billion from P335.39 billion or 1.96 percent — down from February’s 2.02 percent — of banks’ gross loan portfolio.
In 2025, restructured loans were lower at P311.48 billion.
Lenders’ loan loss reserves also went up to P519.46 billion or 3.01 percent of total loans. This was, however, lower than the 3.14 percent a year earlier.
The NPL coverage ratio — a measure of banks’ allowance for potential losses — was lower at 91.37 percent from 95.05 percent in 2025.
Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the slower increase in the NPL ration was due to faster loan growth, which expanded the base compared to the rise in NPLs.
Banks also exercised caution in managing credit risks and lending standards amid the Iran war.
