The Philippine banking industry reported a combined net profit of ₱101.9 billion in the first three months of 2025, up 10.6 percent from ₱92.1 billion a year earlier, driven by robust growth in net interest income amid higher interest earnings and better expense management.

Data from the Bangko Sentral ng Pilipinas (BSP) released on Monday, May 19, showed that banks’ cumulative net interest income rose by 11.6 percent to ₱276.2 billion as of end-March this year, up from ₱247.4 billion in the same period in 2024.

This income represents the gap between interest earned and the total of provisions for losses on accrued interest from financial assets, along with interest expenses.

Banks’ non-interest income grew by 14.5 percent, reaching ₱60.7 billion compared to ₱53 billion last year. Non-interest income comes from fees, gains from financial assets and liabilities, foreign exchange profits, and other similar sources.

The banking system’s operating income also rose by 12.2 percent to ₱336.9 billion during the period, up from ₱300.4 billion in the same period last year.

As of the end of March, banks’ non-interest expenses reached ₱191.1 billion, up 13.1 percent from ₱169 billion last year. These include compensation and benefits, taxes and licenses, fees and commissions, as well as impairment losses and provisions.

Meanwhile, the banking sector’s total losses on financial assets reached ₱29.8 billion during the period, a 36.7 percent increase from last year’s ₱21.8 billion.

Provision for credit losses also went up by 39 percent to ₱34.9 billion from ₱25.1 billion in 2024.

BSP data showed that bad debts written off reached ₱1.2 billion as of the end of March, up 65.3 percent from ₱726 million the previous year. Writing off bad debts, such as non-performing loans, allows banks to clean up their balance sheets by removing loans deemed uncollectible.

Recoveries on charged-off assets also increased 57.5 percent to ₱6.3 billion versus ₱4 billion at the same time last year. These refer to banks’ recoveries from previously written-off financial assets or those with allowances for credit losses.

As of end-March, the banking system’s total assets have increased by 2.6 percent to ₱27.64 trillion from ₱26.95 trillion in February.

As of end-March this year, the BSP is regulating and supervising 44 big banks or universal and commercial banks; 42 thrift banks; 379 rural and cooperative banks; six digital banks; 12 non-