THE proportion of non-performing loans (NPLs) of Philippine banks to their total loans slightly eased in May this year, data released by the Bangko Sentral ng Pilipinas (BSP) on July 11 showed.
The NPL ratio went down to 3.38 percent in May from 3.39 percent in April.
It was also lower than the 3.57 percent logged in the same month in 2024.
BSP data showed that the gross non-performing loans amounted to P527.45 billion.
“The slight easing in the NPL ratio to 3.38 percent reflects early signs of relief from the BSP’s recent rate cuts, which have lowered borrowing costs and helped ease debt servicing pressures,” Reyes Tacandong & Co. Senior Adviser Jonathan Ravelas said.
Ravelas said easing inflation, which settled at 1.4 percent in June, also supports consumer and business cash flows, improving loan repayment capacity.
“While risks remain, especially in consumer lending, the overall outlook for NPLs is cautiously optimistic as monetary easing and stable prices continue to support credit quality,” Ravelas said. (PNA)
