THE Philippine banking system recorded lower net income in the first quarter of the year despite their continued provisions for soured loans, which sustained its surge at end-March, according to the data released by the Bangko Sentral ng Pilipinas (BSP).

Preliminary data showed on Monday that the industry’s P48.44-billion net earnings in January to March eased by 13-percent from the P55.68 billion in the same period in 2019.

Total operating income fell by 15.93 percent to P185.37 billion in the three months to March from P220.51 billion a year earlier, while losses shrank by 30.78 percent to P17.38 billion from P25.11 billion year-on-year.

Lenders’ provision for credit losses on loans and other financial assets slide year-on-year by 19.96 percent to P20.61 billion from P25.75 billion a year earlier.

Banks wrote off P3.42 billion in bad loans, 196.44-percent higher than the year-ago P1.15 billion.

Meanwhile, lenders’ gross non-performing loans (NPL) soared to P448.59 billion at end-March 2021, up year-on-year by 80.02 percent from P249.18 billion.

NPLs are past due loans where the principal or interest is unpaid for 30 days or more after the due date. This includes the outstanding balance of loans payable in monthly installments when three or more installments are in arrears.

Banks’ total loan portfolio saw a year-on-year uptick of 3.91 percent to P10.65 trillion at from P11.09 trillion.

This is equivalent to a gross NPL ratio of 4.21 percent, higher than the 4.08 percent and 2.25 percent a month and a year ago, respectively.

This ratio is the share of bad loans to total loans, inclusive of interbank loans. The latest NPL ratio is the biggest in 11 years, or since August 2009’s 4.25 percent.