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Update on Commercial Bank’s NPLs

01.18.2000

The non-performing loans (NPL) ratio of the commercial banking system went up slightly to 14.61 percent of total loan portfolio (TLP) as of end-November 1999 compared with 14.50 percent in October 1999. The increase stemmed from the 4.2 percent increase in NPL level that offset the 3.4 percent increase in TLP. NPL and TLP stood at P226.7 billion and P1,552.1 billion, respectively.

The industry’s loan loss reserves (LLR) likewise increased to P81.4 billion but coverage ratio (NPL divided LLR) remained at 35.9 percent as LLR growth just kept pace with higher NPL.

 Overall asset quality slightly deteriorated as the ratio of non-performing assets - NPA (NPL plus net ROPOA) to total assets inched up to 11.6 percent from 11.5 percent in October. This was brought about by the 2.9 percent combined increase in NPLs plus ROPOA that outmatched the 2.3 percent rise in total assets. This month’s NPAs and total assets leveled at P307.1 billion and P2,651.7 billion, respectively.

At their current levels, asset quality in Philippine commercial banks as a group still compared favorably with regional counterparts.

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