Philippine banks delivered a record financial performance and profits during Q1 of 2026, as reported by Inquirer.net.

The local financial sector achieved massive income growth driven primarily by wider profit margins.

According to central bank data, the industry booked a combined net income of PHP 104.82 billion.

This figure marks an increase of nearly 3% compared to the same period last year.

The results represent the strongest first-quarter profits for the sector since records began in 2008.

Net interest income climbed 12.44% to reach PHP 310.59 billion as borrowing costs remained high.

Meanwhile, non-interest income remained relatively steady at PHP 60.1 billion during the quarter.

Revenue from fees and commissions increased by almost 7% to PHP 47.62 billion.

Trading operations rebounded sharply to post a PHP 6.22 billion gain from a PHP 1.17 billion loss a year earlier.

However, other income sources, including dividend collections, fell dramatically by 93.6% to just PHP 822 million.

The decline was largely attributed to a PHP 7.7 billion foreign exchange loss.

These strong revenues allowed lenders to offset an 8.7% rise in operating expenses, which reached PHP 207.73 billion.

Global credit observers warned that lenders may still face mounting risks if the Middle East conflict drags on.

A prolonged war could drive up global oil prices and force central banks to keep interest rates elevated.

The central bank recently raised its benchmark interest rate by a quarter point to 4.5% to curb inflation.

Featured image: Edited by Fintech News Philippines based on images by muhammad.abdullah and coffeemill via Magnific.