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BusinessWorld
April 14, 2021 | 12:35 am
Reporter
LENDERS’ bad loans rose for the second straight month in February, bringing the nonperforming loan (NPL) ratio to its highest since 2009 as borrowers had difficulty making payments amid the coronavirus pandemic.
Bad loans are expected to peak by the second half of this year, according to S&P Global Ratings. However, it noted that improvements in borrowers’ capacity to pay remain clouded by the pace of economic recovery which depends on the successful handling of the coronavirus disease 2019 (COVID-19) and the mass vaccination drive.
Gross NPLs held by banks surged 80% to P431.266 billion in February from P239.902 billion a year earlier, based on preliminary data from the Bangko Sentral ng Pilipinas (BSP). It also increased by 9.05% from the P395.465 billion in January.
Author Ranina Sanglap
The Philippines may see its first purely digital banks by 2022 as the central bank prepares to issue them licenses. But the challenge for the neobanks will be to build trust and convince customers in a country with low financial services penetration and a preference for face-to-face interaction, analysts say.
The Bangko Sentral ng Pilipinas in November 2020 approved a new license category for digital banks. The central bank has received two applications as of February one from a new player and the other from an existing bank to convert into a digital bank, BSP s Deputy Governor Chuchi Fonacier told S&P Global Market Intelligence.
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