The non-performing loan ratio of the banking sector rose for the tenth straight month to hit the highest level in over seven years due to the impact of COVID-19, the Bangko Sentral ng Pilipinas said.
According to preliminary data from the BSP, the gross NPL ratio of the banking sector rose to 3.7 percent in October from 3.5 percent in September as restructured and past due loans continued to soar amid the economic fallout from the pandemic.
This was the highest gross NPL ratio since the 3.5 percent recorded in January 2013.A survey conducted by the central bank in June showed that banks expect the industry’s NPL ratio to more than double to 4.6 percent by end-December.
NPL or bad debts refer to past due loan accounts where the principal or interest is unpaid for 30 days or more after due date.
The bad loan ratio of the country’s banking industry has steadily increased since the 2.2 percent recorded in January due to the impact of the pandemic.