THE nonperforming loan (NPL) ratio of Philippine banks eased to 3.27 percent in September from the 3.35 percent posted last month, data from the Bangko Sentral ng Pilipinas showed.
The NPL, or bad loan ratio, which covers past-due debts whose principal or interest is unpaid for 90 days or more, was also lower than the 3.31 percent recorded during the same month last year.
Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the decline signaled “improving asset quality and highlights the resilience of both borrowers and lenders.”
“Steady loan growth and stable economic activity have helped contain credit stress,” Ravelas said.
“For the fourth quarter, NPLs could remain manageable or even improve further, although inflation, borrowing costs and the pace of economic growth will remain key factors influencing loan repayment behavior,” he added.
Soured loans dropped to P593.3 billion in September from P596.3 billion in August but higher than the P538.9 billion recorded in September 2025.
Past-due loans increased to P771.7 billion in September from P769.89 billion, and P677.82 billion a month and year earlier, respectively.
These accounted for 4.26 percent of total loans, down from 4.33 percent in August but higher than the 4.16 percent in September last year.
Restructured loans, meanwhile, rose to P342.78 billion from P340.58 billion in August and P332.76 billion in September 2025.
This accounted for 1.89 percent of banks’ gross loan portfolio, down from 1.92 percent a month earlier and 2.04 percent a year earlier.
Lenders’ loan loss reserves recorded an uptick of P557.98 billion in September, or 3.08 percent of total loans. This was lower than the 3.11 percent a year earlier.
The NPL coverage ratio — a measure of banks’ allowance for potential losses — rose to 94.05 percent from 93.85 percent a year earlier.
