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Manila Bulletin devider Business devider Banking & Finance devider Philippine bank profits climb 4.1% in first half on strong interest income

Philippine bank profits climb 4.1% in first half on strong interest income

Published Aug 12, 2025 04:10 pm

At A Glance

  • The Philippine banking industry ended the first half of 2025 with a combined net profit of ₱198.1 billion in June, up 4.1 percent from last year's ₱190.3 billion, driven by double-digit growth in net interest income.
The Philippine banking industry ended the first half of 2025 with a combined net profit of ₱198.1 billion in June, up 4.1 percent from last year’s ₱190.3 billion, driven by double-digit growth in net interest income.
Data from the Bangko Sentral ng Pilipinas (BSP) released on Tuesday, Aug. 12, showed that banks’ cumulative net interest income jumped by 11.7 percent to ₱565 billion as of June this year, from ₱505.8 billion a year ago.
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 14.6 percent to ₱119.7 billion compared to ₱104.5 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 ₱684.7 billion during the period, compared to ₱610.3 billion in the same period last year.
During the month, banks’ non-interest expenses reached ₱384 billion, up 12.5 percent from ₱341.2 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 ₱73.6 billion at end-June, a 63.9 percent rise from last year’s ₱44.9 billion.
Provision for credit losses also soared by 63.8 percent to ₱84.2 billion from ₱51.4 billion in 2024.
BSP data showed that bad debts written off reached ₱2.7 billion as of June, up 80 percent from ₱1.5 billion the previous year. Writing off bad debts, such as non-performing loans (NPLs) or soured loans, allows banks to clean up their balance sheets by removing loans deemed uncollectible.
Recoveries on charged-off assets also increased 66.3 percent to ₱13.3 billion versus ₱8 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-June, the banking system’s total assets increased by 3.5 percent to ₱28.21 trillion from ₱27.26 trillion in the previous month.

Related Tags

Bangko Sentral ng Pilipinas (BSP) Philippine banking sector
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