State-run Land Bank of the Philippines (Landbank) is ramping up measures to draw out financial gains to hit its ₱44.2-billion full-year net income target after posting higher expenses in the first half and amid expected stress stemming from the waiver of fund transfer fees and the struggling economy.

Speaking on the sidelines of a Bangko Sentral ng Pilipinas (BSP) event on Monday, Aug. 10, Landbank President and Chief Executive Officer (CEO) Lynette Ortiz said the impact of the state lender’s recent waiver of person-to-person (P2P) electronic fund transfer fees is already visible.

Landbank recently joined the wave of banking heavyweights in the country that have decided to eliminate interbank fees.

Despite incurring losses, which remained unquantifiable as of writing, Ortiz said Landbank is now “trying to balance what we have lost in terms of income with our developmental and financial inclusion mandates.”

“So, it’s imperative for Landbank to be able to continue extending these services,” Ortiz said. “But I guess for us, it’s really a matter of how we’re going to recoup what we’ve lost—and we hope we can do that.”

Meanwhile, the CEO noted that Landbank’s gains after zeroing out charges came in the form of increased traffic in e-payments.

Apart from zero fees for P2P transactions, Landbank is also looking at extending fee-free person-to-government (P2G) transactions beyond the trial period, which runs until the end of December.

Last month, BSP Deputy Governor Mamerto E. Tangonan said the central bank is closely monitoring Landbank’s pilot program to eliminate convenience fees on digital payments to government agencies, assessing whether market dynamics alone will compel private commercial lenders to follow suit.

Landbank’s profits dropped by four percent to ₱24.2 billion as of end-June from ₱25.2 billion in the same period last year, as its income from core lending and investment businesses was not enough to balance out higher operating expenses.

Looking at Landbank’s full-year performance, Ortiz is cautiously upbeat that the bank could still post growth by managing risks, firming up its bad-loan buffers, and expanding its loan book, especially as it fulfills its mandate by catering to small businesses.

This year, Landbank is targeting ₱10 billion in new loan releases covering housing, vehicle, and personal credit.

“Everything is so measured for us, even in our credit provisioning and management of risk. So, we’re hoping to eke out some growth by the end of the year. We’re making every effort to do that.”

Ortiz did not shrug off concerns about domestic economic growth, which choked at another post-pandemic low of 2.3 percent in the second quarter. This was partly bruised by the lingering impact of the high-profile flood control corruption scandal.

Despite the weaker-than-expected gross domestic product (GDP) outturn, Ortiz assured that Landbank is exhausting all means to navigate the challenging macroeconomic environment the country is currently facing.

To sustain “decent growth,” Ortiz is betting on Landbank’s consistency in supporting farmers and micro, small, and medium enterprises (MSMEs), as well as portfolio expansion in the second half of 2026.

“Suffice it to say, what we’re doing is really making sure that we are efficient in our use of the balance sheet and that we continue to be consistent with our mandate,” Ortiz said.

Landbank posted a record net income of ₱44 billion in 2025, up by nearly a quarter from ₱40.3 billion in 2024, and breached the ₱40.2-billion target. Ortiz confirmed to the Manila Bulletin that the 2026 net income after tax (NIAT) target still stands at a comparable size to that posted in 2025.

Meanwhile, Landbank could target a medium-term tenor of at least ₱10 billion for its sustainability bond issuance in 2027. Ortiz previously said it will consist of peso-denominated sustainability debt papers.

Ortiz earlier said Landbank’s return to the capital markets in the second half of 2026 was pushed back to early 2027, as the state-run lender has “more requirements” to comply with before returning to issue securities.

“What we’re planning to do is likely to do that next year, as rates are quite high,” Ortiz said.

Landbank previously raised ₱50 billion from its recent bond offering after a surge in demand from retail and institutional investors. Landbank is aiming to deploy 75 percent of the proceeds from the recent bond sale this year.