MANILA, Philippines — The share of non-performing loans (NPLs) to total loans of Philippine banks slightly eased to 3.38% in May 2025, according to data released by the Bangko Sentral ng Pilipinas (BSP).

The figure was a slight improvement from 3.39% in April, and also lower than the 3.57% recorded in May 2024.

BSP data showed that gross NPLs amounted to PHP527.45 billion.

Reyes Tacandong & Co. Senior Adviser Jonathan Ravelas attributed the easing NPL ratio to the central bank’s recent rate cuts, which lowered borrowing costs and helped reduce debt servicing pressures.

“The slight easing in the NPL ratio to 3.38 percent reflects early signs of relief from the BSP’s recent rate cuts, which have lowered borrowing costs and helped ease debt servicing pressures,” Ravelas said.

He added that easing inflation, which slowed to 1.4% in June, is also helping improve consumer and business cash flows, thereby supporting loan repayment capacity.

“While risks remain, especially in consumer lending, the overall outlook for NPLs is cautiously optimistic as monetary easing and stable prices continue to support credit quality,” Ravelas said. (PNA)