Philippine Banks Post Over P208 Billion Profit in First Half

MANILA, Philippines — The Philippine banking industry booked a net profit of P208.39 billion in the first half, up by 5.2 percent from P198.14 billion in the same period last year, as stronger interest earnings offset higher operating costs. Preliminary data from the Bangko Sentral ng Pilipinas showed that the industry’s total operating income climbed by 11.2 percent to P761.14 billion as of end-June from P684.71 billion a year earlier. The improvement was driven largely by net interest income, which increased by 13.1 percent to P638.95 billion from P564.98 billion. Interest income rose by 8.7 percent to P870.73 billion from P800.86 billion, while interest expense slipped by 1.7 percent to P230.73 billion from P234.66 billion. This allowed banks to generate substantially higher net interest earnings during the period. Meanwhile, non-interest income posted a more modest two-percent increase to P122.19 billion from P119.74 billion. Fees and commissions income grew by 7.5 percent to P95.68 billion from P89.02 billion, providing another source of revenue growth. However, trading operations weighed on the industry’s non-interest earnings. Banks recorded a trading loss of P5.67 billion in the first half, reversing the P46.86-billion trading income recorded a year earlier. The swing was largely driven by foreign exchange transactions, which resulted in a realized loss of P8.5 billion compared with a P54.95-billion gain in the same period in 2025. This was partly offset by a turnaround in other income, which reached P23.63 billion from a loss of P24.75 billion a year earlier. On the cost side, non-interest expenses rose by 9.9 percent to P422.07 billion from P384.03 billion. The banking system likewise set aside substantially more funds against potential credit losses during the period. Provisions for credit losses on loans and other financial assets surged by 32.2 percent to P111.33 billion from P84.19 billion a year ago. Overall losses and recoveries on financial assets amounted to a net loss of P101.7 billion, wider than the P73.61-billion net loss recorded in the first half of 2025. Despite the increase in credit-loss buffers and operating costs, profit before tax still rose by 4.7 percent to P255.89 billion from P244.48 billion. Income tax expenses increased by 2.5 percent to P47.5 billion, leaving the industry with a net profit of P208.39 billion for the six months of the year.