PH banks post record Q3 profit
Philippine banks posted their highest third-quarter profit on record in 2026, as elevated rates boosted their margins despite economic headwinds at home and abroad.
Banks booked a combined net profit of P315.5 billion as of end-September, up 4.3 percent from a year earlier, according to preliminary Bangko Sentral ng Pilipinas (BSP) data. It was the industry’s highest third-quarter earnings haul since comparable records began in 2008.
Total operating income climbed nearly 20 percent to P1.2 trillion. The gains were driven largely by net interest income, which grew 14 percent to P979 billion as sticky borrowing costs lifted lending margins.
Noninterest income, however, edged down nearly 5 percent to P178 billion. Within that segment, fees and commissions rose 7 percent to P144 billion, while trading income swelled over five times to P31.4 billion. Profits on sale of other assets reached P10 billion, down by 37.5 percent.
Other income—including dividends and foreign-exchange profit or loss—swung to a loss of P8 billion, from a P31-billion gain posted a year earlier, on the back of foreign exchange losses.
Those revenues more than offset the nearly 10-percent spike in noninterest expenses—like compensation, taxes, impairment losses and provisions—which reached P638 billion.
Overall, total assets of the Philippine banking system grew 10 percent from a year earlier to P31.6 trillion as of September.
Global debt watchers have warned that Philippine banks could still come under pressure from a prolonged conflict in the Middle East. The war is seen to fuel fresh inflation and force central banks to hike interest rates, slowing credit growth and straining borrowers already grappling with higher fuel and food costs.
The BSP has already moved to tighten policy to rein in high inflation. On Oct. 22, a “strong majority” of the BSP’s Monetary Board voted to raise the benchmark interest rate by half a percentage point to 5.5 percent, citing the need for a stronger response to persistent inflation pressures.
The central bank expects inflation to average 6.1 percent this year, considerably above its 3-percent target. It also raised its inflation forecast for 2027 to 6 percent from 5.4 percent, although it expects price growth to ease to 3.3 percent in 2028.
BSP Governor Eli Remolona Jr. said policymakers were concerned about elevated oil prices, the risk of sharp wage increases and potential food supply disruptions stemming from the ongoing El Niño episode.
Remolona said growth could recover by the first quarter of 2027. The Philippine economy expanded by just 2.6 percent in the first half of this year, weighed down by a major corruption scandal and a war-driven surge in prices.
