The total assets of the Philippine banking system reached P24.95 trillion as of end-February, up by P150 billion from P24.80 trillion in January, data from the Bangko Sentral ng Pilipinas show.
Bank deposits also increased to P18.68 trillion in February from P18.66 trillion in the previous month. Of the total, peso deposits slightly declined to P15.35 trillion from P15.43 trillion, while foreign-currency deposits rose to P3.33 trillion from P3.23 trillion.
The banks’ total loan portfolio amounted to P13.54 trillion as of end-February, up from P13.38 trillion in January and P12.414 trillion a year ago.
The gross non-performing loans or “soured loans” remained steady at 3.44 percent in February 2024 compared to January, the BSP said. This was slightly higher than 3.31 percent recorded in February 2023.
Past due ratio or delinquency rate also went up to 4.31 percent in February this year from 4.27 percent in January and 4.04 percent in February 2023. The total past due loans grew 16.35 percent to P584.22 billion from P502.11 billion.
Meanwhile, the banks’ NPL coverage ratio was at 100.06 percent in February, down from 100.29 percent in January and 104.95 percent a year ago.
Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort said in a Viber message the year-on-year increase in NPL was partly due to higher interest rates globally and locally.
“Nevertheless, looking at the bigger picture, banks’ NPL ratio still among the lowest/best in 3.5 years or since August 2020,” he said.
“For the coming months, possible Fed and local policy rate cuts in the coming months of 2024 could help reduce borrowing costs,” Ricarfort said, adding that this could further support recovery for many businesses.
“Thereby [this] could lead to some easing/improvement in banks’ NPL ratio, going forward,” he said.
Ricafort said this would also improve the ability of borrowers to pay off some of their debt and reduce the NPL ratio in the coming months.