THE PHILIPPINE banking industry became more profitable in the first nine months of the year as they booked higher net interest income amid high rates, preliminary central bank data showed.
The combined net earnings of the country’s banks rose by 4.25% to P315.469 billion from P302.617 billion in the same period last year, based on the latest figures from the Bangko Sentral ng Pilipinas (BSP).
The sector’s bottomline was boosted by the 13.53% growth in net interest income to P979.087 billion at end-September from P862.44 billion a year ago.
This came as interest income climbed by 9.76% year on year to P1.337 trillion from P1.219 trillion, while interest expense inched up by 0.72% to P356.346 billion from P353.785 billion.
However, the industry’s non-interest earnings went down by 4.96% to P178.089 billion in the period ending September from P187.389 billion a year prior.
This came as income from fees and commissions went up by 7.03% to P144.301 billion from P134.825 billion.
Trading income also surged more than fivefold (462.44%) to P31.434 billion from the P5.589 billion recorded the previous year.
However, earnings from the sale of non-financial assets went down to P10.4 billion from P16.23 billion.
Banks’ other income was at a P8.044-billion loss, a reversal of the P30.743-billion profit seen at end-September 2025.
Meanwhile, BSP data also showed that the sector’s non-interest expenses increased by 9.8% annually to P638.456 billion in the nine-month period from P581.471 billion.
This was largely driven by higher spending on compensation, taxes and licenses, fees and commissions, other administrative expenses, and amortization.
However, banks posted lower impairment losses and provisioning during the period.
On the other hand, losses on financial assets widened to P157.548 billion as of end-September from P117.258 billion a year earlier.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said banks’ sustained growth in loans and deposits allowed the sector to book a higher net income in the nine-month period.
Based on latest available BSP data, banks’ outstanding loans to businesses and consumers rose by 11% to P15.121 trillion at end-August from P13.618 trillion a year prior.
“Banks have been among the most profitable businesses or industries for many years amid the adoption of the global best practices in managing credit, market, and operational risks that helped ensure continued profitability despite global and local economic challenges,” Mr. Ricafort also said in a Viber message.
“For the coming months, effective risk management practices based on global best practices would still be important to better deal with both global and local risks…,” he added.
RECORD-HIGH ASSETS
On the other hand, assets held by Philippine banks hit a fresh high of P31.599 trillion as of end-September, according to separate preliminary BSP data.
This topped the previous all-time high of P31.277 trillion as of end-August, and was 9.81% higher than the P28.776 trillion recorded in the comparable year-ago period.
Banks’ assets are mainly supported by deposits, loans, and investments. These include cash and due from banks as well as interbank loans receivable (IBL) and reverse repurchase (RRP) net of allowances for credit losses.
As of end-September, the banking sector’s total net loan portfolio inclusive of IBL and RRP stood at P17.575 trillion, increasing by 11.45% from P15.77 trillion a year earlier.
Net investments, or financial assets and equity investments in subsidiaries, climbed by 7.17% to P9.124 trillion from P8.514 trillion a year prior.
Banks’ net real and other properties acquired also jumped by an annual 25.22% to P168.684 billion from P134.709 billion.
Domestic lenders’ other assets came in 21.79% higher at P2.716 trillion as of end-September from P2.23 trillion in the same period last year.
However, cash and due from banks amounted to P2.014 trillion in the nine months to September, declining by 5.38% annually from P2.128 trillion, BSP data showed.
Meanwhile, the total liabilities of the banking industry reached P27.891 trillion during the period. This was up 10.69% from P25.197 trillion at end-September last year.
The bulk of these liabilities were deposits, which edged up 7.47% year on year to P22.639 trillion from P21.066 trillion.
Of the total, peso-denominated deposits amounted to P18.587 trillion, while foreign currency deposits were at P4.052 trillion. — Katherine K. Chan