MANILA, Philippines - Rural and cooperative banks saw their bad loan ratio worsen in the first half, the Bangko Sentral ng Pilipinas reported yesterday.
The non performing loan (NPL) ratio of rural and cooperative banks went up to 13.45 percent as of June from 12.36 percent in the same period last year.
This developed as the banks’ total loan portfolio rose 3.2 percent to P132.89 billion from P128.74 billion, while soured loans climbed 12.3 percent to P17.87 billion from P15.91 billion.
NPLs are obligations that remain unpaid for at least 30 days after the due date. The NPL ratio pertain to the amount of bad loans over the total loan portfolio.
But looking at it quarter-on-quarter, the central bank said the NPLs of rural and cooperative banks slid 1.3 percent to P17.87 billion from P18.11 billion.
“(The) decrease in the banks’ gross non-performing loans was a welcome development following the three previous quarters wherein NPLs increased quarter-on-quarter,” the BSP said.
At the same time, central bank data showed rural and cooperative banks set aside loan loss reserves amounting to 57.31 percent of their gross NPLs as of June.
The BSP said the loans extended by rural and cooperative banks made up 2.55 percent of the whole banking system’s total loan portfolio of P5.2 trillion as of June. Rural and cooperative banks’ bad loans, meanwhile, accounted to 0.34 percent of the industry’s total loan portfolio.
“The Bangko Sentral ng Pilipinas assesses the loan quality of all banking groups as part of its efforts to maintain high standards for credit risk management,” the central bank said.