Banks' soured loans ease to 3.27% in June

The non-performing loans (NPL) ratio of universal and commercial banks eased by 3.27 percent as of the end of June as more corporate and individual borrowers settled their outstanding financial obligations on time, the Bangko Sentral ng Pilipinas (BSP) reported Friday. The central bank posted an NPL ratio of 3.37 percent in May and 3.36 percent in June of last year. June of this year was the 21st month that the NPL ratio was below four percent, the BSP said. Monetary authorities believe that the NPL ratio of banks will keep improving as the stronger-than-expected gross domestic product (GDP) growth in the first quarter of the year would translate to better corporate earnings and lower interest rates. In the first quarter of the year, the GDP growth zoomed to its fastest level in almost three years after expanding by 7.3 percent. Stronger domestic output, BSP officials explained, would help corporate and individual borrowers settle their financial obligations on time. Amid a global economic meltdown, the Philippines avoided recession in 2009 as the country's GDP eased to 0.9 percent last year from 3.8 percent in 2008. —JE/VVP, GMANews.TV