Household arrears to banks remain stable
Mbongeni Mguni | Wednesday December 10, 2025 09:25
According to the central bank figures, household arrears to commercial banks were measured at P3.89 billion in September, from P3.8 billion in August, indicating stability in the key banking indicator.
Despite the tighter economic conditions, which include slowing employment, layoffs and constrained government spending to SMEs and other key sectors, household arrears have not strengthened as much as expected by most analysts.
BoB data indicates that in January, the arrears were pegged at P3.29 billion, rising to P4.22 billion in July and easing back to P3.89 billion by September. While the central bank is not qualitative, analysts have said much of the stability is due to banks having applied stricter credit assessment protocols after the pandemic, which in the ensuing years has helped them control their arrears’ positions.
Local banks have also automated parts of their credit assessments, while others have even introduced Artificial Intelligence to remove human error or bias from the process. Central bank figures show that households continue their traditional dominance of banks’ arrears, accounting for about 59% as at September.