An Evaluation of the micro level and macro level impact of non-performing assets among universal banks in the Philippines from the period of 1999 to 2007

• Main Authors: Guilalas, Julius Ralph Nicholson, Nocon, Eizel Jen, Tan, Raissa Gayle, Vitug, Patrick
• Format: text
• Language: English
• Published: Animo Repository 2008
• Subjects: Banks and banking > Philippines; Finance > Philippines"
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/14451
• Institution: De La Salle University

Banking and financial institutions play a major role in a country's economic standpoint. Their development and progress dictate the economic and financial stability that a country needs to sustain. Non-Performing Assets are defined as obligations that are past due for more than ninety days. These are mainly due to credit risk in which borrowers are unable to meet their loan obligations. While there are many other variables affecting the overall performance of banks, Non-Performing Assets are increasingly becoming one of the factors for a bank's decrease in its profitability. The paper examines the effects of Non-Performing Assets on a micro and macro level of data variables in the Philippines banking industry. Using data from universal banks in the Philippines, the paper tests these micro and macro level variables using the Ordinary Least Squares Method. Micro level variables that will be studied are the universal banks' Profitability, Universal Bank's Efficiency, Capital Adequacy compliance and universal bank's Credit Deployment. Gross Domestic Product and inflation rate will be the macro level variables that will be analyzed. The paper aims to determine how much of an influence Non-Performing Assets has on these variables and in doing so, be able to come up with ways to lessen or counteract this effect.