The Bangko Sentral ng Pilipinas (BSP) reported yesterday a 20.50 percent increase in past-due receivables during the second quarter of the year, indicating that credit card holders are having a harder time keeping their personal finances straight.
The BSP said that as of end-June 2008, the credit card receivables (CCRs) of universal/commercial banks (U/KBs) and thrift banks (TBs), inclusive of credit card subsidiaries, reached P122.6 billion, up by 6.2 percent from the previous quarter.
The BSP said the proportion of total CCRs to total loan portfolio (TLP) of these institutions, however, was virtually unchanged at 5.3 percent compared with 5.4 percent in the previous quarter, net of interbank loans.
The BSP said U/KBs accounted for 81.2 percent or P99.5 billion of the P122.6 billion total CCRs. Credit card subsidiaries of U/KBs held 14.7 percent or P18 billion while non-linked TBs represented the balance of 4.1 percent or P5.1 billion.
On the other hand, the BSP said non-performing CCRs went up to 11.6 percent of total CCRs, rising from 10.2 percent in the first quarter of the year.
The BSP said the increase in the ratio resulted from the 20.5 percent hike in non-performing CCRs to P14.2 billion which was faster than the growth in total CCRs.
But the BSP said the report did not present comparative year-on-year figures due to the recent change in financial reporting.
Prior to end-March 2008, computation of delinquency was Past Due plus Items in Litigation.
Effective end-March 2008, computation of delinquency is Past Due and Already Non-Performing plus Items in Litigation based on the new Financial Reporting Package (FRP).
But the BSP said the proportion of non-performing CCRs to total non-performing loans (NPL) ratio stood at 10.6 percent (up from 8.8 percent last quarter) whereas non-performing CCRs to TLP ratio settled at 0.6 percent (same as last quarter).
Credit card companies at the time had also started to bring down the cost of using plastic money to reflect the decline in interest rates in 2007 when the BSP was on an easing cycle.
The BSP has expressed concern that credit card rates were failing to adjust to market forces to the detriment of consumers using plastic currency, saying there was a disjoint between prevailing interest rates and the effective rates on credit card loans.