The proportion of non-performing loans (NPLs) of Philippine banks to their total loans continued to ease in June this year, data released by the Bangko Sentral ng Pilipinas (BSP) showed.

Data released Tuesday indicated that the NPL ratio went down to 3.34 percent in June from 3.38 percent in May.

The gross non-performing loans amounted to PHP530.29 billion.

Sought for comment, Rizal Commercial Banking Corporation chief economist Michael Ricafort said the recent easing in the NPL ratio may be attributed to the faster growth in bank loans which expanded by over 12 percent in June.

"Lower Fed and BSP policy rates since the latter part of 2024 reduced interest rate costs and fundamentally improved the ability to pay by some borrowers, thereby partly supported the recent easing of the NPL ratio," he said.

"Improved lending risk management standards based on global best practices also improved banks’ asset quality in terms of lower NPL ratio.”

PNA PHOTO