THE nonperforming loan (NPL) ratio of Philippine banks hit an eight-month high of 3.37 percent in April, data from the Bangko Sentral ng Pilipinas (BSP) shown.
The bad loan ratio — which covers past-due debts whose principal or interest is unpaid for 90 days or more — rose from March’s three-month low of 3.29 percent but was slightly better than the year-earlier 3.39 percent.
It was the highest since the 3.50 percent seen in August 2025.
Soured loans — which rose to P579.89 billion in April from P568.55 billion a month earlier — were significantly higher than the P519.23 billion a year ago.
Similarly, past-due loans piled up to P763.59 billion from P736.18 billion in March and P653.26 billion in April 2025. These accounted for 4.44 percent of total loans, up from 4.26 percent in March and April 2025.
Restructured loans also climbed to P342.92 billion from P338.39 billion or by 1.99 percent — up from March’s 1.96 percent — of banks’ gross loan portfolio.
In 2025, restructured loans were lower at P311.66 billion.
Lenders’ loan loss reserves also went up to P526.85 billion or 3.06 percent of total loans. This was, however, lower than the 3.22 percent a year earlier.
The NPL coverage ratio — a measure of banks’ allowance for potential losses — was lower at 90.85 percent from 95.1 percent in 2025.
Sought for comment, Union Bank of the Philippines chief economist Ruben Carlo Asuncion said the higher NPL ratio likely reflected the delayed impact of elevated interest rates on borrowers, as well as a return to normal asset quality levels following the post-pandemic recovery.
“We expect NPLs to remain broadly stable with a slight upward bias in the near term, before easing as monetary conditions improve,” he added.
