The non-performing loan ratio of banks in the Philippines accelerated for the fourth straight month as bad debts continued to soar amid the resurgence of COVID-19 cases in the country.
Preliminary data from the Bangko Sentral ng Pilipinas showed the gross NPL ratio of the banking industry hit a fresh 12-year high of 4.35% in April from 4.21% in March.
The latest gross NPL ratio was the highest since the 4.37% recorded in May 2009. The ratio was also higher than the 2.31 recorded in April last year.
The asset quality of local banks has been deteriorating as banks have been piling up NPLs or past due loan accounts, as well as bad debts due to the challenging business environment brought about by the pandemic.
A loan becomes past due when the principal or interest is unpaid for 30 days or more after due date.
BSP Governor Benjamin Diokno earlier said the industry’s NPL ratio may exceed six% this year.