Relationship of macroeconomic and bank-specific variables to non-performing bank assets in the Philippines from 2003-2012

• Main Authors: Ngo, Ana Carmina Y., Salazar, Romaine L., Tomas, Aleeza Marie R., Villarosa, Riza Clarisse B.
• Format: text
• Language: English
• Published: Animo Repository 2013
• Subjects: Banks and banking > Philippines; Loans > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18304
• Institution: De La Salle University

One of the indicators of a financial sector's health is its loan quality. The literature provides that a high level of non-performing loans is linked with bank failures and financial crisis. Using multiple regression techniques, this paper seeks to identify and understand the determinants of non-performing assets (NPAs) in the Philippine Banking System. In particular, it points towards examining the relationship of various macroeconomic and bank-specific variables with respect to NPAs drawn on selected universal and savings banks in the Philippines across the period 2003 to 2012. It employs regression analysis and correlational research design in order to recognize the numerical and linear relationship among the key macroeconomic and bank-specific variables to gross non-performing assets (GNPA). Results show that bank assets, return on assets, and unemployment are statistically significant with respect to GNPA.