Non-performing loans and credit growth in Philippine universal banks

Date of Publication


Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Management of Financial Institutions

Subject Categories

Finance and Financial Management


Ramon V. Del Rosario College of Business


Financial Management Department

Thesis Adviser

Kristine Mae Lagdameo

Defense Panel Member

Tyrone Panzer Chan Pao

Ray Almonares

Nino Datu

Liberty Patiu


The main objective of this study is to provide evidence on how the non-performing loans (NPLs) of the Philippine universal banks behave through the credit cycle using the top 10 publicly-listed Philippine universal banks based on free float market capitalization as the sample. This study also aims to understand further the behavior of NPLs through various macroeconomic and bank-specific factors. To achieve those objectives, the researchers localized the study of Chavan and Gambacorta (2016) which used a dynamic panel data (DPD) model based on Generalized Method of Moments (GMM). It was found that bank credit growth and the NPL ratio have an inverse relationship which indicates a countercyclical behavior, but the impact of credit growth is not statistically significant. On the other hand, the researchers found evidence on the persistence of NPLs and the positive impact of real interest rate and the negative impact of funding structure in terms of the ratio of borrowings from sources other than the BSP to total assets on the NPL ratio. Lastly, the researchers did not find a structural break in the coefficients of the model.

Abstract Format






Accession Number


Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

xi, 148 leaves : illustrations (some color) ; 29 cm. + 1 computer disc ; 4 3/4 in.


Bank loans--Philippines; Universal banks-- Philippines

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