MANILA: The non-performing loans (NPL) ratio of Philippine banks is anticipated to improve by 2025, driven by strong economic growth and decreasing interest rates, according to Fitch Ratings. This forecast comes as part of a broader trend of expected improvement in five out of 14 larger Asia Pacific markets, with further gains projected for nine markets by 2026. According to Philippines News Agency, Fitch Ratings' recent report highlights that India, Vietnam, and the Philippines are poised for the most significant near-term improvements. This optimistic outlook is attributed to robust economic expansion and loan growth, with the Philippines benefiting additionally from lower interest rates. The latest data from the Bangko Sentral ng Pilipinas indicates that the NPL ratio for Philippine banks stood at 3.6 percent as of the end of October this year. Fitch Ratings also forecasts double-digit loan growth in the Philippines, India, and Vietnam, contrasting with single-digit growth expected in most other APAC mar kets. The report notes that banks in these countries are expected to exhibit the highest risk appetite over the 2025-2026 period, spurred by strong economic growth, competitive dynamics, and increasing financial inclusion. This environment has encouraged banks to enhance loan growth and extend credit to riskier segments. Furthermore, Fitch Ratings observes that banks in the Philippines and India are particularly inclined towards unsecured retail loans and financing for small and medium enterprises. Supporting this trend, BSP data reveals that bank lending in the Philippines saw a double-digit increase in October, expanding by 10.6 percent.