Inquirer
Bad loans jumped to 8-mo high in July
The non-performing loan (NPL) ratio in the Philippine banking sector slightly increased to 3.4 percent in July, reversing a two-month downward trend and indicating ongoing financial strain on households and small businesses.
This marks the highest NPL ratio since November 2024, with bad loans rising by 5.4 percent to P535.45 billion compared to the previous year.
Despite the increase in bad loans, the total loan portfolio of the banking system saw a healthy 11 percent growth, reaching P15.77 trillion.
Experts attribute the rise in soured loans to persistent pressures on consumers and small businesses as they adapt to post-pandemic economic conditions and global uncertainties, such as trade disputes.
While lower interest rates might be stimulating borrowing, not all borrowers are demonstrating equal resilience, prompting banks to strengthen their loan loss provisions as a precautionary measure.
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