Philippine banks’ combined net earnings rose 4.14 percent in the second quarter of 2025 to P198.14 billion, according to data from the Bangko Sentral ng Pilipinas (BSP) released Tuesday.
The BSP reported that net profit for the banking industry increased from P190.26 billion in the same period last year.
Net interest income grew 11.7 percent to P564.98 billion, while non-interest income rose 14.59 percent to P119.74 billion.
However, the industry’s losses on financial assets widened by 63.98 percent to P73.61 billion from P44.89 billion in June 2024.
The BSP attributed this to a significant increase in provisions for credit losses on loans and other financial assets, which grew to P84.19 billion from P51.38 billion a year earlier.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said the rise in net earnings was driven by an easing non-performing loan ratio and improved asset quality.
He also cited stronger loan growth, trading gains from rate cuts by the BSP and the US Federal Reserve, and the country’s 5.5 percent gross domestic product growth in the second quarter.
“RRR cuts since the latter part of 2024 also infused more than P700 billion into the banking system that fundamentally increased loanable and investible funds that led to more interest, investment, and other income for banks,” Ricafort said in a message.
Ricafort said potential rate cuts by the Fed and BSP, along with a possible reserve requirement ratio (RRR) cut in 2026, could further reduce borrowing costs, boost loan demand, and lead to more trading gains for banks.
