Philippines' bad loan ratio eases in September

Published: 20 Nov 2009 00:51:51 PST

* Sept non-performing loan ratio 3.25 pct vs 3.50 pct in Aug

* Bad loan ratio below 4 pct for 12th straight month

MANILA, Nov 20 - The Philippine central bank released on Friday data on commercial banks' non-performing loans (NPLs) as of September.

The following shows banks' soured loans as a percentage of their outstanding loans:

Sept Aug July June May April NPL ratio 3.25 3.50 3.49 3.36 3.74 3.65

CONTEXT:

- Non-performing loans remained below 4 percent of total loans of banks for the 12th consecutive month in September, similar to levels prior to the 1997-1998 Asian financial crisis.

- Bad loans peaked at more than 18 percent in October 2001 following defaults by corporate borrowers as a consequence of the Asian crisis.

- The decline in Philippine banks' bad loans was aided by a law imposed by the government for a limited time granting incentives to buyers of banks' soured assets.