Strong returns from lending propped up the earnings of the country’s banks through the first half of 2026, even as turbulence in the markets dragged down their trading desks.
According to figures from the Bangko Sentral ng Pilipinas (BSP), lenders across the industry earned a combined P208.39 billion in net income between January and June. That total is nearly twice the P104.82 billion logged in the year’s opening quarter.
The bulk of the money came from interest-related operations. Banks generated P870.73 billion in interest income against P230.73 billion in interest expenses, leaving them with P638.95 billion in net interest income. High lending rates let institutions collect more on loans and investments, and that cushion held up even as the cost of funding moved higher.
Combined operating income landed at P761.14 billion, with the remaining P122.19 billion coming from non-interest sources. Charges for fees and commissions did the heavy lifting there, bringing in P95.68 billion, while miscellaneous income added P23.63 billion and gains from selling or redeeming financial instruments contributed P7.95 billion.
Trading was where the damage showed. Treasury activity flipped into a P5.67-billion loss by the close of June. On top of that, banks absorbed P5.12 billion in unrealized mark-to-market losses and P8.50 billion in realized losses on foreign exchange deals, both tied to unsettled conditions in the financial and currency markets.
Costs also climbed. Non-interest expenses reached P422.07 billion for the half. Administrative spending made up the biggest slice at P160.59 billion, ahead of the P137.23 billion that went to personnel. The remainder covered P54.65 billion in taxes and licenses, P32.01 billion in fees and commissions, and P30.06 billion in depreciation and amortization.
The reporting covers the pooled results of universal and commercial banks, thrift banks, rural and cooperative banks, and digital banks.
Setting aside P47.50 billion in income tax, the sector’s pre-tax haul came to P255.89 billion, a sharp jump from the P128.54 billion booked in the prior quarter. Provisioning for soured loans stood at P111.33 billion as of end-June, and with P14.06 billion recovered from written-off assets, banks reported net losses and recoveries on financial assets of P101.70 billion.
