Philippine commercial banks' non-performing loans edged down to 4.54 percent of total loans at the end of March from 4.68 percent in February, the central bank said on Friday.
The improvement in bank's soured loans was due to the 2.05 percent expansion in total loans of commercial banks over the previous month, which was accompanied by a 0.93 percent decline in bad loans, the central bank said in a statement.
Commercial banks' total loan portfolio climbed to 2.12 trillion pesos ($48 billion) at the end of March from the previous month's 2.08 billion.
Total non-performing loans dropped to 96.42 billion pesos in March from 97.33 billion in February.
The banks' bad loan ratio has significantly improved with the help of a law that grants incentives to buyers of banks' soured assets.
Bad loans peaked at 18.8 percent in October 2001 following defaults by corporate borrowers as a consequence of the Asian financial crisis.