BAD loans incurred by banks grew 5.06 percent in the period ending July, according to the latest data on non-performing loans (NPLs) released by the Bangko Sentral ng Pilipinas (BSP).
The data showed that gross NPLs reached P453.24 billion in January to July, higher than the P431.23 billion posted in the same period last year.
‘Gross NPL represents the actual level of NPL without any adjustment for loans treated as ‘loss’ and fully provisioned,’ the BSP explained.
The bulk of these bad loans were held by universal banks (UBs) with P295.98 billion, a 7.65-percent increase from the P274.94 billion posted in the same period last year.
State-owned banks followed, posting P140.05 billion in bad loans as of July 2025. However, this was a 4.07-percent contraction from the P145.99 billion posted as of July 2024.
Government banks include the Land Bank of the Philippines, the Development Bank of the Philippines and the Al-Amanah Islamic Investment Bank of the Philippines, according to the BSP.
Commercial banks followed with NPLs reaching P10.11 billion as of July this year. This was also a contraction of 13.12 percent compared to the P11.63 billion as of July 2024.
While foreign institutions recorded the lowest amount of NPLs as of July at P7.1 billion, this was a 19.05-percent growth from the P5.96 billion recorded as of July last year.
Foreign institutions consisted of foreign banks, excluding foreign banks’ subsidiaries, according to the BSP.
Meanwhile, net NPLs of banks posted flat growth of 0.26 percent to P192.59 billion as of July 2025 from the P192.1 billion posted in the same period last year.
‘As a complementary measure in the computation of gross NPL, banks are required to compute their net NPLs, which shall refer to gross NPLs less specific allowance for credit losses on the total loan portfolio, provided, that such specific allowance for credit losses on the total loan portfolio shall not be deducted from the total loan portfolio,’ BSP said.
The bulk of these net NPLs were from UBs, which grew 12.28 percent to P125.42 billion as of July 2025 from the P111.7 billion recorded as of July 2024.
This was followed by government banks which saw its net NPLs contract 14.45 percent to P61.79 billion in the seven-month period this year from P72.23 billion posted in the same period last year.
The largest decline in net NPLs were recorded by commercial banks at 28.75 percent. This placed the net NPLs of these banks to P3.4 billion as of July 2025 from P4.77 billion as of July 2024.
Foreign banks, meanwhile, posted a growth of 7.45 percent, which brought its net NPLs to P1.98 billion as of July this year from P1.84 billion as of July last year.