THE nonperforming loan (NPL) ratio of Philippine banks edged up to 3.57 percent in May, Bangko Sentral ng Pilipinas (BSP) data showed, rising from April's 3.45 percent and also the highest since June 2022's 3.60 percent.

Bad loans rose to P495.67 billion in May, compared to P480.64 billion a month earlier. Year on year, it rose from P436.11 billion.

The central bank defines NPLs as past-due loans where the principal or interest is unpaid for 90 days or more after the due date, including the outstanding balance of loans payable in monthly installments when three or more installments are in arrears.

Past-due loans declined to P608.07 billion from P618.04 billion in April. These accounted for 4.38 percent of total loans, lower than the previous month's 4.43 percent.

Year on year, past-due loans were 4.17 percent of the total at P525.51 billion.

Restructured loans, meanwhile, rose to P295.89 billion in May from P290.37 billion in the previous month. This brought it to 2.13 percent of banks' gross loan portfolio.

A year earlier, restructured loans were higher at P310.29 billion, or 2.46 percent.

Lenders' loan loss reserves edged up to P474.88 billion, equivalent to 3.42 percent of total loans and lower than the 3.52 percent seen in the same month last year.

The NPL coverage ratio — which indicates banks' allowance for potential losses due to bad loans — was also lower at 95.81 percent from 101.81 percent a year earlier.