Philippine banks’ bad loans rise despite lower September ratio
The non-performing loan ratio declined to 3.27 per cent as banks’ lending portfolios expanded more quickly than their problem debts.
Bad loans at Philippine banks reached ₱593.27 billion in September, up 10.1 per cent from a year earlier, even as their share of total lending declined, according to preliminary Bangko Sentral ng Pilipinas data.
The industry’s non-performing loan ratio dropped from 3.35 per cent in August to 3.27 per cent. It also came in below the previous September’s 3.31 per cent and was the lowest reading since December 2025, when it was 3.07 per cent.
Banks’ gross lending portfolios increased by 11.4 per cent year on year, reaching ₱18.13 trillion compared with ₱16.28 trillion. That expansion outpaced the rise in bad loans, which had totalled ₱538.92 billion a year earlier. Non-performing loans have principal or interest payments overdue by at least 90 days.
Missed payments were also reflected in past-due loans, which include debts not necessarily classified as non-performing. These climbed 13.9 per cent year on year to ₱771.75 billion. Their share of lending was 4.26 per cent, down from 4.33 per cent in August.
Loans with modified repayment terms rose three per cent to ₱342.78 billion, while their proportion of total lending fell from 2.04 per cent a year earlier to 1.89 per cent. Banks increased their provisions for possible credit losses by 10.3 per cent to ₱557.98 billion.
