Data released by the Bangko Sentral ng Pilipinas showed the soured loans of the banking sector surged by 83.7 percent to 463 billion pesos in April from 252 billion pesos in the same month last year.
Bank loans slipped by 2.5 percent to 10.6 trillion pesos as of end-April from 10.9 trillion pesos in the same period last year amid weak demand from borrowers due to uncertainties brought about by the pandemic.
This was despite the aggressive 200-basis-point cut in interest rates by the Monetary Board, which brought the benchmark rate to an all-time low of two percent last year.
Data from the central bank also showed past due loans – referring to all types of loans left unsettled beyond payment date – jumped by 38 percent to 574 billion pesos in April from 416 billion pesos a year ago.
However, the BSP believes the impact of the pandemic on the overall condition and performance of the banking system remains manageable.