The level of non-performing loans (NPLs) has been relatively flat since 2008 despite the continued uptrend of total loan portfolios (TLP). The Philippine banking system’s non-performing loan ratio (NPL) stayed low at 2.0 percent of total loans as of end-August 2017. This is fully covered as NPL coverage ratios registered at 114.1 percent. Philippine banks have developed a good ability to absorb losses.
Data as of end-June 2017 shows that the capital adequacy ratio (CAR) of universal and commercial banks is stable at 15.3 percent on a solo basis and 16.0 percent on a consolidated basis. This is well above the minimum CAR requirements.