Banks’ April NPL highest in 5 mos
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HE bad loans ratio of Philippine banks in April 2025 was the highest recorded by the Bangko Sentral ng Pilipinas (BSP) in five months, and economists believe this should prompt financial institutions to be “vigilant in credit risk management.” Philippine Institute for Development Studies (PIDS) Senior Research Fellow John Paolo Rivera told BusinessMirror that the increase in non-performing loans (NPLs) ratio was a result of tighter financial conditions and greater cost of living pressures, among others. The latest BSP data showed the banking system’s NPL ratio increased to 1.47 percent in April 2025, the highest since the 1.59 percent posted in November 2024. The data showed the NPL ratio was at 1.58 percent in April 2024 and 1.44 percent in March 2025. “It is not yet a cause for alarm, but it is a signal for banks to remain vigilant in their credit
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risk management. If the trend continues over the next few months, it could indicate that some sectors of the economy are experiencing difficulty servicing debt, possibly due to slower than expected income recovery or tightening liquidity,” Rivera told this newspaper on Monday. Rivera also said higher cost of living expenses may have been felt not only by households but also businesses. He also said elevated interest rates may have also played its part in increasing the NPL ratio in April 2025. He said it is likely that given this data, monetary authorities such as the BSP as well as banks themselves will monitor NPLs more closely as this can impact on the growth of the economy moving forward. “If credit quality deteriorates further, it could prompt more cautious lending behavior and affect the overall pace of credit growth, which in
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In Parañaque City and Quezon City, parents, teachers, students, and volunteers came together on Monday, June 9, 2025, to clean and repair school facilities as part of the Department of Education’s annual Brigada Eskwela. At Baclaran Elementary School Units 1 and 2, families scrubbed floors and painted walls in preparation for the new school year. Meanwhile, at Pinyahan Elementary School, the EcoWaste Coalition and the Ateneo Center for Research and Innovation led a campaign for chemical safety and zero waste, advocating ecofriendly practices while helping spruce up classrooms. Brigada Eskwela is a nationwide community initiative that reflects the Filipino spirit of bayanihan—working together to ensure students return to clean, safe, and welcoming learning spaces when classes begin on June 16. NONIE REYES/NONOY LACZA
See “Banks’,” A2
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‘OVERVALUED’ PHL PESO IS ‘HURTING ECONOMY’ www.businessmirror.com.ph
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Tuesday, June 10, 2025 Vol. 20 No. 240
P25.00 nationwide | 2 sections 22 pages | 7 DAYS A WEEK
By Cai U. Ordinario @caiordinario
HE “overvalued” peso has been hurting the performance of the Philippine economy, particularly the manufacturing sector and the competitiveness of exports, according to ANZ Research. In its latest analysis, ANZ Research pointed out that the overvalued peso has been “a persistent concern” that has weighed down the country’s competitiveness for years as this has also occurred in the 1980s and 1990s. The analysis stated that based on traditional currency fair value models such as the real effective exchange rate (REER), the most cited gauge of a currency’s value, the peso has been overvalued since 2019. “We believe correcting the peso’s overvaluation, or even pursuing a mildly undervalued exchange rate, whenever possible, makes economic sense. A growth model that is reliant on consumption and imports funded by labor exports and remittances inhibits the transition towards higher productivity over time,” ANZ Research said.
On Monday, the peso closed at P55.81 to the US dollar. The peso has been trading steadily at around P55 to the greenback since April 30 this year. “The tradable goods sector has been disproportionately affected— exports relying heavily on imported inputs [for example the assembly-oriented semiconductors] have fared better than those relying on domestic inputs, leading to a sharper decline in domestic industries. This is because a real appreciation of the exchange rate makes imports cheaper,” ANZ Research. In order to address this, ANZ Research said there is a need to purse efforts to undervalue the peso. This, however, will require the Bangko Sentral ng Pilipinas (BSP) to “accumulate significant foreign exchange reserves.” The country’s Gross International See “Overvalued,” A2
PUBLIC SERVICE LAW, TWEAKS IN FRANCHISE KEY TO A.I. USE
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FFORTS to amend legislative franchises and a 94-year-old law can help open the floodgates to help the country maximize the use of Artificial Intelligence (AI). At the launch of the Human Development Report (HDR) on Monday, Department of Economy, Planning, and Development (DepDev) Planning and Policy Group Assistant Secretary Reynaldo R. Cancio said efforts are under way to bridge the digital divide by improving competition in the digital space. The amendment of the Public Services Act has already opened telecommunication sector to greater competition and this should be supported by addressing legislative franchises and
the amendment of the Radio Control Law of 1931. “We will continue to enhance competition in this sector by pursuing the implementation of the Amended Public Services Act, which opened the sector to foreign investments, particularly in key sectors such as telecoms,” Cancio said in his speech. “We will also be pursuing reforms to address remaining barriers to entry in this sector.” Cancio said these barriers are the requirements on the granting of legislative franchises. He said a telecommunication franchise should be secured from a regulator rather than Congress. While the amendment of the Radio Control Law of 1931 is See “Public,” A2
FORECAST: RAINBOW RATINGS A vibrant morning rainbow stretches over Makati’s business district on Monday, June 9, 2025—a fitting backdrop as Japan Credit Rating Agency (JCR) affirmed the Philippines’ A- credit rating with a stable outlook, citing “sustained economic growth” fueled by domestic demand, strong foreign exchange reserves (P105.3 B), low external debt, and key fiscal reforms. The decision supports further investment flows and infrastructure development under the CREATE MORE Act. MAU VICTA
MAP to gov’t: Focus on cutting basic costs By Andrea E. San Juan
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@andreasanjuan
HE Philippine government should redirect its attention to reducing the cost of food, power, transportation and housing, among others, instead of merely setting low wages to improve overall productivity, according to the Management Association of the Philippines. “We in the Management Association of the Philippines [MAP], support initiatives that help improve the lives of all minimum-wage earning Filipino workers and their families. However, we do not support the P200 daily wage increase which was approved recently by the
House of Representatives,” MAP said in a statement on Monday. The business group explained why it is against the wage hike, underscoring that the country’s “basic problem” is not low wages, but high costs. “We believe that attention should be given to wage-to-cost ratio, not just wages. We have the third highest minimum wage in Asia, and some of the highest costs—especially of food, power, transportation, and housing,” MAP said. With this, the business group is prodding the Executive and Legislative branches of government to focus on reducing these costs to help make the country more “export-competitive, address inef-
ficiencies across all sectors to improve overall productivity and reduce all forms of waste.” The business group also urged the Bicameral Conference Committee to take into account the potential impact of the P200 daily wage increase on inflation and business sustainability, particularly on the millions of small enterprises that struggle just to survive. “Since setting a minimum wage is a very complex process where many factors have to be taken into account, we call on the BICAMERAL CONFERENCE COMMITTEE of the House and the Senate to conduct further consultations with all affected sectors, like employers, employees, consumers, involved
agencies, among others, before reaching a decision,” MAP pointed out. Moreover, the business group suggested that research be conducted as to whether setting a national minimum wage, or regional ones instead, is better. Meanwhile, MAP is also making an appeal to employers to “help alleviate the plight of the minimumwage earners by implementing urgent measures, like paying their employees’ share in SSS, Pag-IBIG and PhilHealth contributions, sharing with their employees at least 20 percent of their organizations’ net income before income tax,among others.” See “Map,” A2
PESO EXCHANGE RATES n US 55.6140 n JAPAN 0.3841 n UK 75.2791 n HK 7.0878 n CHINA 7.7298 n SINGAPORE 43.1417 n AUSTRALIA 36.1380 n EU 63.3777 n KOREA 0.0409 n SAUDI ARABIA 14.8304 Source: BSP (June 9, 2025)