Philippine banks are poised for sustained profitability through 2026, bolstered by robust loan demand and a global shift toward monetary easing, according to Fitch Ratings.

In a report dated Jan. 13. the debt watcher identified the Philippines, alongside India, Vietnam, and Indonesia, as a primary engine for regional banking growth, describing strong loan expansion as “critical lever” for maintaining bottom-line health in emerging markets.

“Strong loan growth in many emerging markets—particularly India, Vietnam, the Philippines and Indonesia—remains a critical lever for sustaining profitability,” Fitch Ratings said.

Lending by big banks, or universal and commercial banks (U/KBs), held steady in November 2025 as private consumption remained robust.

Fitch added that the nearing-end monetary easing cycles across central banks in Asia Pacific (APAC) would prop up earnings growth for most banks in the region, including the highly profitable Philippine banks.

Despite steady loan growth in November, Reyes Tacandong & Co. Senior Adviser Jonathan Ravelas earlier said lingering flood-control issues still threaten to weigh on banks’ lending confidence.

“When trust is shaken, investors hesitate, and banks become more cautious,” said the economist.

Regionally, Fitch expects a marginal drop in APAC banks’ profits from lending. This will slightly reduce profits relative to their risk-weighted assets, but the effect should be “manageable” in the near term, the debt watchdog said.

“Intensifying competition, regulatory and conduct risks, and normalisation in fee and trading income in some markets could add further earnings variability within individual banking systems and across APAC,” it added.

Meanwhile, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. told the private sector last week that the banking system is “healthy and resilient, giving banks the strength to lend and fuel growth.”

As of end-November 2025, the Philippine banking system’s total assets climbed by ₱2 trillion to ₱28.72 trillion from ₱26.73 trillion in 2024 on the back of stable lending activity.

Preliminary BSP data showed that the combined assets of domestic banks increased 7.4 percent year-on-year as of end-November 2025, continuing the 7.1-percent expansion seen in October.

Banks’ assets are primarily supported by deposits, loans, and investments, including cash, balances due from other banks, interbank loans receivable (IBL), and reverse repurchase agreements (RRP), net of credit loss provisions.

As of end-November, the banking sector’s total loan portfolio, including IBL and RRP, increased by 11.7 percent to ₱15.89 trillion from ₱14.23 trillion in the same period in 2024.

Net investments, which include financial assets and equity holdings in subsidiaries, rose by 6.5 percent to ₱8.39 trillion from ₱7.88 trillion in 2024. Net real and other properties acquired (ROPA) jumped by a fifth to ₱137 billion from ₱113.8 billion in 2024.

Meanwhile, cash and balances due from banks declined by one-fifth to ₱2.05 trillion from ₱2.57 trillion in 2024. Other assets of the banking industry rose 15.9 percent to ₱2.25 trillion in November 2025, from ₱1.94 trillion a year earlier.

Meanwhile, total liabilities of the banking system reached ₱25.07 trillion during the period, up 7.2 percent from ₱23.4 trillion in 2024.

Deposits accounted for the bulk—84.7 percent—of banks’ liabilities, rising to ₱21.24 trillion as of end-November from ₱19.79 trillion in 2024. Of the total deposits, peso-denominated accounts amounted to ₱16.45 trillion, while foreign currency deposits reached ₱3.34 trillion.

Rizal Commercial Banking Corp. chief economist Micael Ricafort said the ₱2-trillion year-on-year growth in banks’ assets was “largely due to the continued double-digit growth in bank loans, especially the more than 20-percent growth in consumer loans.”

Ricafort added that it was also driven by the sustained expansion in banks’ net income amid trading gains, which increased banks’ capital and total assets. He noted that banking has been one of the “most profitable industries in recent years.”

For Ricafort, further easing in key borrowing costs—now at 4.5 percent—and banks’ reserve requirements will bolster demand for loans and help banks grow their assets faster than the economy.

“Sustained growth in banks’ deposits also supports continued growth in bank loans, earnings, investments, and overall asset growth,” he added.