NPLs are debts left unpaid for at least 30 days past their due date, with the NPL ratio taken as one of the measures used by the BSP in monitoring the asset quality of banks.
The increase in bad loans outpaced the 12.9% expansion in the banks' total loan portfolio to P682.511 billion from the previous year's P604.419 billion, based on central bank data.
Non-performing assets held by banks -- which include foreclosed properties and other seized items of value -- stood at P54.974 billion in January, 16.2% higher than the P47.291 billion recorded a year earlier.
The banks' coverage for bad loans also slipped to just 71.71% from last year's 72.74%, according to the data.
However, the lenders beefed up their allowance for potential loan defaults to P17 billion, up by a nearly a fifth from P14.514 billion previously. Relative to total loans, the allotted cover against credit losses rose to 3.48% from 3.27%.
At end-2015, NPLs held by thrift banks went up to a revised P31.399 billion, up by 22.96% from the year-ago level of P25.373 billion, which brought the NPL ratio to 4.53%. The lenders booked a cumulative P11.786 billion in net income that year, up by 14.6% from 2014's P10.287 billion.
The BSP regularly checks the quality of loans and assets of Philippine banks in keeping high standards for the country's banking sector to ensure ample credit risk management.
There were 67 thrift banks operating in the Philippines as of end-September, based on central bank data.
Source: BWorld Online