Banks' soured loans ease to 2.88% in Dec.

The non-performing loans (NPLs) ratio of universal and commercial banks eased in December to its lowest level since the start of the Asian financial crisis in 1997, the Bangko Sentral ng Pilipinas (BSP) said Sunday. The central bank said soured the loans ratio improved to 2.88 percent last December, from 3.07 percent in November and from 2.97 percent in December 2009. "This is the lowest recorded NPL ratio for universal and commercial banks since the onset of the 1997 Asian financial crisis," the BSP said in a statement. The NPL ratio in December reflected the 27th consecutive month the NPL ratio was below 4 percent. Central bank data showed the industry's loan portfolio rose to P2.802 trillion in December from P2.724 trillion in December 2009, while NPLs totaled P80.8 billion from 80.91 billion int eh same comparable period. Monetary authorities are saying the NPL ratio would continue to improve on the heels of a surprising, positive gross domestic product (GDP) of 7.3 percent last year — the fastest since 1976. This year, the country's GDP is expected to accelerate between 7 percent and 8 percent, prodding companies to go for expanding their operations. The strong economic growth would also help corporate and individual borrowers service their financial obligations on time, the central bank said. BSP Gov. Amando Tetangco Jr. considered 2010 as a banner year for Philippine banks that contributed largely to the country's stronger-than-expected economic growth. The BSP said the banking system posted a capital adequacy ratio of 15.23 percent on solo basis and 16.21 percent on consolidated basis as of end-June last year. The ratio was above the central bank's 10 percent minimum requirement and thethe Basel Accord's 8 percent standard ratio. — JE/VS, GMA News