While geopolitical tensions and the United States’ (US) tariffs have been spilling over to the Philippines, debt watcher S&P Global said the country’s 10 largest banks are stable enough against external risks.

“Large banks are on solid ground amid tariff tensions,” Nikita Anand, director at S&P Global’s financial institutions ratings, said in the credit rating agency’s report published on Monday, June 30. Anand was referring to the 10 biggest commercial banks in the Philippines.

These banks are BDO Unibank Inc., Metropolitan Bank & Trust Co. (Metrobank), Land Bank of the Philippines (Landbank), Bank of the Philippine Islands (BPI), China Banking Corp. (Chinabank), Rizal Commercial Banking Corp. (RCBC), Philippine National Bank (PNB), Union Bank of the Philippines (UnionBank), Security Bank Corp., and Development Bank of the Philippines (DBP).

Anand said the “strong” capitalization and liquidity of these banks provide a “buffer against unexpected risks,” noting that external risks include the global economic slowdown, market volatility, and uncertainties—all of which are indirect impacts of US President Donald Trump’s tariffs and ongoing geopolitical tensions.

While these pressures “could lead to some pain,” credit expansion will be strong. Anand cited supportive factors such as the Philippines’ stable, domestic-consumption-driven economy, subdued inflation, and low jobless rates.

S&P Global noted that the country’s economy will accelerate at a rate faster than the growth of many Asian peers. The Philippines is projected to match Vietnam’s regional-best growth rates of 5.9 percent in 2025 and six percent in 2026.

Lending to corporations accounts for 78 percent of total loans in the banking system. Debt of businesses in the Philippines is below 70 percent of the country’s gross domestic product (GDP).

Meanwhile, loans to Filipino consumers account for 22 percent of the total, with unsecured loans seeing rapid expansion. Data showed that credit card and unsecured loans accounted for nine percent of total loans, massively higher than the five percent in 2019 or before the Covid-19 pandemic.

According to Anand, the increasing share of unsecured loans and lingering external uncertainty have pushed higher credit costs for banks. However, such risks are “manageable because of low household leverage and stable employment conditions.”

Anand further said that Philippine banks have outperformed most of their Asian counterparts this year, including those in Singapore, Malaysia, India, Thailand, and China. Even if the Bangko Sentral ng Pilipinas (BSP) delivers another rate cut in the future, this will be offset by the share of high-cost unsecured loans, lower operating expenses (opex), and reductions in banks’ reserve requirements.

But given the decline in Philippine banks’ profitability to over 1.4 percent from nearly 1.5 percent in 2024, local banks’ profitability trails behind Indonesian banks’ 2.5 percent.