Preliminary data released by the Bangko Sentral ng Pilipinas (BSP) showed that the non-performing loan (NPL) ratio of Philippine banks rose from the revised 3.51 percent in June – the highest in 25 months or since the 3.6 percent in June 2022.
UnionBank chief economist Ruben Carlo Asuncion said the uptick in NPLs could be due to the restrictive monetary environment amid the BSP’s rate hikes from May 2022 to October 2023.
“With high interest rates, both consumers and firms find it expensive to refinance debt and end up failing obligations eventually,” he said.
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