The loan quality of the commercial banking industry as of May 31, 2000 improved slightly as the non-performing loans (NPL) ratio receded anew to 14.41 percent of total loan portfolio (TLP) from 14.46 percent in April and 14.45 percent same month a year ago. The NPL ratio was enhanced as the 0.8 percent growth in TLP outweighed the 0.4 percent rise in the volume of NPLs. NPLs and TLP (inclusive of interbank loans) leveled at P218.6 billion and P1,517.1 billion, respectively.
Provisioning for loan loss reserves (LLRs) has now reached P96.1 billion from P95.2 billion last month and P70.8 billion last year, further propping up coverage ratio (LLR divided by NPL) to 44.0 percent from last month’s 43.7 percent and 33.4 percent a year ago. Increases in LLRs of 0.9 percent and 35.7 percent overtook the increment in NPLs of 0.4 percent and 3.0 percent from last month and year ago levels.
The industry’s overall asset quality has remained stable as the ratio of NPAs (NPLs plus net ROPOA) to total assets inched down to 11.9 percent from 12.0 percent a month ago. The P46.4 billion or 1.7 percent growth in total assets cushioned the impact of the combined increments in NPLs and net ROPOA of P3.2 billion or 1.0 percent. NPAs and total assets leveled at P321.4 billion and P2,705.8 billion, respectively.