Gross NPL ratio climbs to 3.38%, bad loans up by P21.8B

Philippine banks' asset quality deteriorated in January as the gross nonperforming loan (NPL) ratio rose to 3.38%, up from 3.27% in December.

The amount of bad loans increased by 2.5% to P512.83 billion, while total bank loans stood at P15.18 trillion as of end-January, down slightly from the previous month but up significantly year-over-year.

Past due loans rose by 4.6% month-on-month to P633.07 billion and restructured loans edged up by 0.3% to P311.22 billion.

Experts noted that higher loan demand during the holiday season, coupled with economic growth slowdowns, contributed to the rise in NPLs, though they remain optimistic about future improvements as interest rates decline and economic conditions improve.