Bank loan arrears rise 22% on economic woes

Friday, March 20, 2026 | 950 Views |

Tighter conditions: Arrears to banks rose significantly last year PIC MORERI SEJAKGOMO

Arrears on loans issued by commercial banks rose 21.5% last year to about P6.9 billion, led by households, as the contracting economy piled pressure on borrowers’ ability to repay.

The figure for last year came even as banks restrained their lending activities, with total loans extended starting 2025 at P87.2 billion, peaking at P90.6 billion in May and reaching December at about P90 billion.

The arrears rose from 6.4 percent of the total outstanding loans in January to 7.7 percent in December 2025, indicating the growing difficulties faced by banks in recovering credit extended.

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