Soured loans up just 1% as RP economy grows

The non-performing loans of universal and commercial banks inched up by only 1 percent in August as borrowers paid attention to their financial obligations in line with the country’s strong economic performance, the central bank said in a statement this weekend. The Bangko Sentral ng Pilipinas (BSP) said the industry’s soured loans totaled P86.59 billion in August this year from P83.84 billion in the same period last year. The BSP said that total loan portfolio of universal and commercial banks went up by almost 3 percent in August. Loans lent universal and commercial banks reached P2.617 trillion in August 2010 from P2.397 trillion disbursed in the same period last year. The BSP said that that the non-performing loans ratio of banks was 3.31 percent in August from 3.5 percent in the same comparable period, and 0.06 percentage point lower than the 3.37 percent in July 2010. August was the 23rd consecutive month that the soured loans ratio fell below 4 percent. Meanwhile, the loan loss reserves of universal and commercial banks increased to P98.92 billion in August 2010 from P88.3 billion in August last year, while the industry’s restructured loans declined to P44.42 billion in August this year from P46.8 billion in the same month last year, the BSP noted. The central bank said the industry’s total past due loans and items in litigation was steady at P115.83 billion in August. Also, the gross assets of banks rose year-on-year to P5.663 trillion in August from P5.18 trillion, the BSP said. The industry’s non-performing assets dropped to P215.16 billion from P222.14 billion, central bank records show. Strong economic growth, lower interest rates, and better corporate earnings would help corporate and individual borrowers service their financial obligations on time, monetary authorities said. They are also convinced that the industry’s total loan portfolio would continue to increase in light of expansion projects being done by companies to cope with stronger domestic demand on heightened business activities. —With Jesse Edep/VS, GMANews.TV