{"id":5986,"date":"2024-12-11T18:16:30","date_gmt":"2024-12-11T17:16:30","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=5986"},"modified":"2024-12-11T18:16:30","modified_gmt":"2024-12-11T17:16:30","slug":"non-performing-loans-surge-to-highest-levels-in-two-years","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2024\/12\/11\/non-performing-loans-surge-to-highest-levels-in-two-years\/","title":{"rendered":"Non-Performing Loans Surge to Highest Levels in Two Years"},"content":{"rendered":"\n<p class=\"p2\">By <b>Luisa Maria Jacinta C. <\/b><span class=\"s2\"><b>Jocson, <\/b><\/span><i>Reporter<\/i><\/p>\n<p class=\"p4\"><span class=\"s3\">The asset <\/span><span class=\"s4\">quality of PHILIPPINE BANKS worsened further as the gross nonperforming loan (NPL) ratio for the industry climbed to a high not seen in over two years this October. <\/span><\/p>\n<p class=\"p5\"><span class=\"s4\">Preliminary figures from the Bangko Sentral ng Pilipinas (BSP) revealed that the ratio increased to 3.6% from 3.47% in September and 3.44% a year prior. <\/span><\/p>\n<p class=\"p5\"><span class=\"s5\">This marked the highest bad loan ratio since it reached 3.75% in May 2022, matching the 3.6% NPL ratio recorded in June 2022. <\/span><\/p>\n<p class=\"p5\"><span class=\"s4\">According to data from the BSP, the amount of troubled loans rose by 1.3%, reaching P524.31 billion in October from P517.45 billion the previous month. <\/span><\/p>\n<p class=\"p5\"><span class=\"s4\">In comparison to last year, bad loans surged by 16.7% from P449.45 billion. <\/span><\/p>\n<p class=\"p5\"><span class=\"s4\">Loans are classified as nonperforming when they remain unpaid for a minimum of 90 days post-due date. Such loans are considered risky assets as the likelihood of repayment is low. <\/span><\/p>\n<p class=\"p5\"><span class=\"s4\">The banking sector&#8217;s total loan portfolio amounted to P14.55 trillion, decreasing by 2.4% from P14.9 trillion at the end of September. However, it increased by 11.3% compared to P13.07 trillion a year ago. <\/span><\/p>\n<p class=\"p5\"><span class=\"s4\">Delinquent loans rose by 1.3%, totaling P640.88 billion in October, up from P632.87 billion the previous month. It also experienced a 15% increase from P557.27 billion a year earlier. <\/span><\/p>\n<p class=\"p5\"><span class=\"s4\">This resulted in a past due ratio of 4.4%, above the 4.25% recorded in September and the 4.26% from a year ago. <\/span><\/p>\n<p class=\"p5\"><span class=\"s4\">Conversely, restructured loans decreased by 0.6% month-over-month, totaling P292.75 billion compared to P294.53 billion in September, and saw a decline of 5.3% from P309.16 billion the previous year.<\/span><\/p>\n<p class=\"p5\"><span class=\"s4\">Restructured loans comprised 2.01% of the industry&#8217;s overall loan portfolio, an increase from the 1.98% in the prior month but lower than 2.36% in October 2023. <\/span><\/p>\n<p class=\"p5\"><span class=\"s6\">Loan loss reserves for banks reached P487.52 billion, representing a rise of 1% from P482.84 billion in September, and increasing by 5.7% from P461.41 billion a year prior. <\/span><\/p>\n<p class=\"p5\">This contributed to the loan loss reserve ratio increasing to 3.35%, up from 3.24% <span class=\"s5\">the previous month and 3.53% a year ago. <\/span><\/p>\n<p class=\"p5\">The coverage ratio for lenders\u2019 NPL, reflecting the reserves for expected losses from bad loans, fell to 92.28% in October from 93.31% in September and 102.66% in 2023.<\/p>\n<p class=\"p5\">Michael L. Ricafort, Chief Economist at Rizal Commercial Banking Corp., indicated that the rise in NPLs may be linked to the onset of the BSP\u2019s cycle of monetary easing.<\/p>\n<p class=\"p5\">The central bank initiated its policy easing cycle in August, implementing a 25-basis-point (bp) rate cut, followed by another reduction of the same magnitude in October, resulting in a key rate of 6%.<\/p>\n<p class=\"p5\">Earlier, BSP Governor Eli M. Remolona, Jr. mentioned the possibility of lowering or maintaining rates during the Monetary Board\u2019s final policy review of the year scheduled for December 19.<\/p>\n<p class=\"p5\">\u201cThe series of storm damages may have resulted in disruptions to businesses leading to tangible and opportunity losses, contributing to a heightened gross NPL ratio,\u201d commented Mr. Ricafort.<\/p>\n<p class=\"p5\"><span class=\"s7\">In October, the nation experienced the impact of Severe Tropical Storm Kristine and Super Typhoon Leon. <\/span><\/p>\n<p class=\"p5\">Mr. Ricafort also pointed to geopolitical risks and tensions in the Middle East which have \u201cimpacted global investments, trade, and various business operations.\u201d<\/p>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.bworldonline.com\/top-stories\/2024\/12\/12\/641074\/npl-ratio-highest-in-over-two-years\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Luisa Maria Jacinta C. Jocson, Reporter The asset quality of PHILIPPINE BANKS worsened further as the gross nonperforming loan (NPL) ratio for the industry climbed to a high not seen in over two years this October. Preliminary figures from the Bangko Sentral ng Pilipinas (BSP) revealed that the ratio increased to 3.6% from 3.47%<\/p>\n","protected":false},"author":3,"featured_media":5987,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[388],"class_list":{"0":"post-5986","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy-and-markets","8":"tag-return-a-list-of-comma-separated-tags-from-this-title-npl-ratio-highest-in-over-two-years"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Non-Performing Loans Surge to Highest Levels in Two Years - WSJ-Crypto<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wsj-crypto.com\/index.php\/2024\/12\/11\/non-performing-loans-surge-to-highest-levels-in-two-years\/\" \/>\n<meta property=\"og:locale\" content=\"it_IT\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Non-Performing Loans Surge to Highest Levels in Two Years - WSJ-Crypto\" \/>\n<meta property=\"og:description\" content=\"By Luisa Maria Jacinta C. Jocson, Reporter The asset quality of PHILIPPINE BANKS worsened further as the gross nonperforming loan (NPL) ratio for the industry climbed to a high not seen in over two years this October. 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