PH banks’ bad loan ratio declined in March, says BSP

MANILA, Philippines—Bad loans in proportion to the total credit portfolio of the country’s universal and commercial banks dropped further in March, as the industry continued to observe strict lending standards imposed by regulators.

The Bangko Sentral ng Pilipinas said the proportion of the non-performing loans of these banks to their outstanding loans had been nearing levels seen ahead of the Asian financial crisis of 1997, whose aftermath pushed the level of bad loans to record highs, until banking reforms led to their gradual decline.

“This [March] is the 30th consecutive month that the non-performing loans [NPL] ratio of universal and commercial banks had been below 4 percent,” the BSP said in a statement released Friday. An NPL ratio of 4 percent or below is considered acceptable by regulators.