Central bank writes off P2.8 billion in past-due loans

MANILA, Philippines —  The Bangko Sentral ng Pilipinas (BSP) wrote off P2.8 billion in past-due loans in 2025 as it moved to clean up long-standing legacy exposures and refocus its credit operations on its role as lender of last resort.

In its 2025 Annual Report, the central bank said the write-off, together with higher principal collections, helped slash long-past-due accounts by 95.2 percent to P219.3 million at end-2025 from P4.5 billion a year earlier.

As a result, the BSP’s total outstanding loans and receivables declined to P92.4 billion from P96.9 billion as of end-2024.

Principal collections, meanwhile, surged to P1.8 billion in 2025 from just P300.9 million the previous year, or nearly six times the 2024 level.

The BSP attributed the increase largely to the settlement of financial assistance loans by the Philippine Deposit Insurance Corp. and the recovery of past-due accounts, which together amounted to P1.5 billion.

Another P316.9 million came from current accounts, including availments under the central bank’s discount window facility and notes receivable-certificate of indebtedness.

The balance-sheet cleanup allowed the BSP to shift its attention away from resolving old exposures and toward strengthening its lender-of-last-resort function, under which it provides temporary liquidity support to banks when necessary.

As of end-2025, 38 banks maintained active credit lines with the BSP worth a combined P348.4 billion. These consisted of 22 rural and cooperative banks, 10 universal and commercial banks and six thrift banks.

Actual loan availments under the BSP’s discount window facility remained limited at P60.1 million for the entire year.

The central bank said all loans granted since 2014 had been collected on or before maturity, although it continues to pursue collection of the remaining long-past-due accounts.

Separately, the BSP also accelerated the disposal of acquired properties, generating P1.6 billion in estimated net income in 2025.

The central bank disposed of 424 properties with a combined net book value of P702.9 million for an aggregate purchase price of P2.3 billion.

Net income from the property disposals increased by P1.1 billion from the previous year, driven largely by the P1.9-billion sale of a property in Dasmariñas City, Cavite. That transaction alone generated P1.2 billion in net income.

As of end-2025, the book value of the BSP’s acquired and other real properties stood at P11.4 billion.

Collections from sales contract receivables reached P405 million, while interest income amounted to P94.5 million. The BSP also booked P231.5 million in miscellaneous income, largely from P195.7 million in realized profits on properties sold on installment in previous years.