MANILA – Banks’ bad loans again surged in May, recent data from the Bangko Sentral ng Pilipinas (BSP) showed.
Non-performing loans (NPL) reached P479.4 billion in May, representing 4.63 percent of total loans outstanding, according to the BSP data. This breached the NPL ratio of 4.35 percent logged in April this year, and the 2.43 percent in May 2020 when total sour loans hit P463.6 billion and P262 billion, respectively.
May’s ratio was the highest level in almost 13 years. It outpaced the 4.5 percent figure recorded in September 2008, a year marked by the global financial crisis. During that period, the BSP tallied P123.6 billion in bad loans.
An economist cited ongoing challenges posed by the coronavirus disease 2019 (COVID-19) pandemic for the swelling of banks’ non-performing loans.
“Borrowers having trouble to keep their businesses afloat are trying their best to stretch their payment terms or refinance their loans,” Regina Capital managing director Luis Limlingan told CNN Philippines.
Limlingan also noted that borrowers and lenders alike were compelled to reassess portfolios and short-term strategies with the emergence of new COVID-19 variants, and with no “immediate” end in sight for the global health crisis.
Both economic officials and market watchers have been counting on a speedier, more efficient vaccine rollout, and economic recovery measures to combat the downturn triggered by the pandemic.(CNN)
