Non-performing loans of Philippine commercial banks rose slightly from a month earlier to 14.65 percent of the total loans in June, when the lenders also improved their coverage for probable losses, the central bank said Sunday.
The non-performing loan ratio for May was 14.32 percent.
The banks' loan loss coverage ratio — money set aside to cover estimated losses in their loan portfolio — improved to 45.9 percent, a central bank statement said.
Monetary authorities have been pushing banks to build loan loss reserves equivalent to at least 50 percent of the value of estimated losses, it said.
The central bank said the loan loss reserves in the system rose 5.3 percent from a month earlier to 101.1 billion pesos ($2.25 billion) in June.
Meanwhile, President Joseph Estrada has ordered government banks to tighten their lending policies, the finance department said.
The state lenders and other government financial institutions will not be allowed to extend new loans or enter into new contracts with private parties with past due loans, those with records of foreclosure or special bad debt settlement, or those with unresolved disputes with the government.
Estrada also ordered the central bank, the finance department, the economic planning office and a number of state credit guarantee institutions to ensure that government guarantees on both government projects as well as loans of private firms be only granted under the "most restrictive conditions," the finance department said in a statement. — (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
