The profit of the country’s universal and commercial banks increased by double digits in the first three quarters of the year as the growing economy led to higher demand for financial products and services.
Regulators said the healthy financial condition of banks showed that they have the ability to support consumption and investment activities, mainly through loans, and thus help maintain the robust growth of the economy.
Data from the Bangko Sentral ng Pilipinas showed that big banks registered a combined net income of P80.11 billion as of end-September, up by 15 percent from the P69.63 billion recorded in the same period last year.
Data showed that interest income, mainly earnings from interest on loans extended to clients, amounted to P216.02 billion, up by 0.4 percent from P215.15 billion.
Non-interest income—which includes earnings from services like bills payment, remittance facilitation, custodianship and underwriting—reached P96.88 billion, up by 16 percent from P83.57 billion.
The banking sector usually moves with the economy, as the demand for financial services, such as loans to fund investments, rises when there is economic growth.
In the first three quarters, the Philippine economy grew by 6.5 percent, and expectations are that full-year growth will exceed the official target of 5 to 6 percent.
In the third quarter alone, the economy grew by a surprising 7.1 percent, the fastest in Southeast Asia.
The growth was credited to higher government spending and robust household consumption, which is partly aided by remittances from overseas-based Filipinos.
According to the BSP, the country’s banking sector is sound and stable, and will be able to continue providing the funding support for the economy.—Michelle V. Remo