The proportion of non-performing loans (NPLs) of Philippine banks to their total loans hit a two-month low in November last year, data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday showed.
The NPL ratio in November 2024 went down to 3.54 percent from 3.60 percent in October 2024.
It was also the lowest recorded since the 3.47 percent in September 2024.
The NPL ratio in November last year, however, was higher than the 3.41 percent seen in the same month in 2023.
The gross non-performing loans amounted to PHP520.53 billion, down from the PHP524.31 billion in October 2024, but higher than the PHP454.28 billion in November 2023.
In a text message, Leonardo Lanzona, an economist at the Ateneo de Manila University, said the lower NPL ratio in November was “fundamentally a market correction from the exceedingly high NPL rates” in October.
“Furthermore, the BSP has signaled [that] its easing policy on the interest rate may be tempered as inflationary pressures have gone up. Also, housing prices have declined, resulting in lower investment in real estate,” Lanzona said.
“Because of these, the banks and investors have been more prudent.” (PNA)
