Philippine banks' nonperforming loans hit a nine-month high of 3.5% in August 2025 due to typhoons, inflation, and economic slowdown.

Philippine banks' gross nonperforming loan ratio rose to 3.5% in August 2025, the highest in nine months, driven by increased loan defaults linked to typhoons, inflation, and economic slowdown. NPLs reached P550.1 billion, up 7.3% year-on-year, while past-due loans rose 9.8% to P693.1 billion. Despite higher delinquencies, loan loss reserves increased to P519.29 billion, and the coverage ratio remained at 94.4%. The Bangko Sentral ng Pilipinas cut interest rates to support growth, and analysts say the banking sector remains resilient amid ongoing challenges.