The industry’s Non-Performing Loans (NPL) ratio slightly improved to 14.65 percent (as defined under BSP Circular No. 351 a/) from 14.82 percent last quarter. The improvement was due to the re-definition of NPLs. Without the re-definition, the NPL ratio would have been 14.88 percent, higher by 0.06 percentage point from the last quarter. Rural Banks’ (RBs) NPL ratio went down to 14.55 percent from 14.84 percent a quarter ago while Cooperative Banks’ (CBs) NPL ratio grew to 15.87 percent from last quarter‘s 14.65 percent.
Loan loss reserves (LLR) to NPL or NPL coverage ratio declined to 34.19 percent from 35.77 percent last quarter with both RBs and CBs exhibiting downgrades to 34.29 percent from 35.69 percent and 33.12 percent from 36.78 percent, respectively, from last quarter.
The ratio of Real and Other Properties Owned or Acquired (ROPOA), gross to gross assets slightly rose to 9.01 percent from 9.00 percent last quarter with some P228 million worth of additional foreclosed assets. RBs and CBs reported higher ROPOA to gross assets ratio this quarter. Meanwhile, the ratio of Non-Performing Assets or NPA (NPL plus ROPOA) to gross assets deteriorated by 0.08 percentage point to 17.97 percent from 17.89 percent last quarter.
NPA coverage ratio (LLR plus ROPOA reserves to NPA) was down to 18.20 percent from 18.96 percent a quarter ago with the industry having lesser provisioning for NPAs with a 0.79 percent or P21 million decrease in total NPA reserves.
The ratio of gross restructured loans (RL) to TLP decreased to 2.58 percent from 2.90 percent last quarter as RLs decreased by 6.79 percent or by P92 million.
Total past due (past due plus items in litigation) of the industry rose by 4.11 percent or by P0.34 billion (P8.51 billion from P8.17 billion last quarter). Despite such increase in past due level, past due ratio (total past due over TLP) declined to 17.33 percent against last quarter’s 17.48 percent in view of the substantial increase in TLP by 4.99 percent or by P2.33 billion.
a/ The Monetary Board, in its Resolution No. 1277 dated 5 September 2002, approved the exclusion from NPL, loans classified as “Loss” in the latest BSP examination which are fully covered by allowance for probable losses; provided, that the bank has no unbooked valuation reserves and other capital adjustments required by the BSP and that such loans shall also be deducted from Total Loan Portfolio (TLP) for purposes of computation. This was implemented through BSP Circular No. 351 that took effect on 19 September 2002.