Unpaid credit card debt rises as of June this year

Unpaid credit card debt owed to Philippine universal, commercial, and thrift banks increased as of end-June this year, indicating that consumers may have experienced difficulty meeting financial obligations. Nonperforming credit card receivables increased by 16.1 percent during the period to P16.5 billion from P14.2 billion last year, the Bangko Sentral ng Pilipinas (BSP) in a statement. As a result, the ratio of non-performing credit card receivables to total credit card receivables went up at 12.7 percent from last quarter’s 12.2 percent and year ago’s 11.6 percent. “The quarter-on-quarter increase in the ratio came about as the 7.1 percent hike in non-performing credit card receivables outweighed the expansion in total credit card receivables," the central bank said. Moreover, the BSP said that “the quality of credit card receivables of thrift banks that are not affiliated with universal or commercial banks stood better than that of universal or commercial banks together with their subsidiaries." Thrift banks not affiliated with universal or commercial bank registered the following ratios: non-performing credit card receivables to total credit card receivables (9.1 percent), non-performing credit card receivables to total non-performing loans (2.8 percent), and non-performing credit card receivables to total loan portfolio (0.3 percent). The BSP said these ratios were much lower than the ratios posted by universal or commercial banks with subsidiaries at 12.8 percent, 13.3 percent, and 0.7 percent, respectively. Non-performing credit card receivables to total non-performing loans ratio stood at 12.1 percent (up from 11.2 percent last quarter and 10.6 percent a year ago). Total non-performing credit card receivables to total loan portfolio ratio was the same as last quarter’s and year ago’s 0.6 percent ratio. In the meantime, credit card receivables of universal, commercial, and thrift banks rose year-on-year as of end-June but its ratio to the total loan portfolio fell. Credit card receivables increased by 5.71 percent to P129.56 billion from P122.56 billion, the BSP said. However, as a portion of banks’ total loans, net of interbank loans, credit card receivables decelerated to 5.01 percent from 5.27 percent due to faster year-on-year growth in total loan portfolio. Quarter-on-quarter, credit card receivables went up by 3.1 percent from P125.67 billion during the first quarter. Universal and commercial banks account for 81 percent or P104.9 billion of the credit card receivables followed by their credit card subsidiaries at 15.1 percent or P19.6 billion while thrift banks cornered 3.9 percent or P5.1 billion. - GMANews.TV