THE banks’ aggregate loan portfolio shrank nearly two percent or by more than P50 billion in July to P2.98 trillion, the same month that bank lending actually accelerated by 19 percent, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.

The diminished state of loan portfolios came at a time when the country’s commercial banks and their bigger expanded license or universal bank counterparts reported as much soured or non-performing loans in July as the previous June at 2.45 percent.

This indicates continued bank vigilance against indiscriminate lending even when there is much liquidity in the system and the cost of money indicated by loan rates is at historic lows.

According to BSP data, the banks’ total loan portfolio of only P2.979 billion in July stood lower than portfolio aggregating P3.03 trillion the previous June.

Soured loans eased further to P73.05 billion during the month from P74.14 billion the previous June.

Net of what the banks lend to each other under the interbank loan mechanism, the NPL ratio stood unchanged at 2.62 percent in June and in July and eased by 1.09 percentage points from the year-ago NPLs averaging 3.71 percent.

Restructured or defaulted loans subsequently made current stood slightly lower to P41 billion from P41.48 billion in June and at P44.53 billion the previous year.

The restructured loans amounted to only P41 billion in July or an improvement from P41.48 billion in June and P44.53 billion last year.

Real and other properties acquired or ROPA similarly eased to only P118.76 billion in July from P119.52 billion in June and P128.94 billion last year.

The banks’ non-performing assets, representing NPLs plus ROPA, also eased to P191.81 billion in July from P193.66 billion in June and P212.98 billion last year.

Reserves for non-performing assets, which includes loan-loss provisions plus ROPA, totaled only P119.88 billion from 121.22 billion and year- ago NPA reserves of P123.03 billion.

(Jun Vallecera)