Bank of the Philippine Islands is tempering its earnings outlook for the rest of 2026, with president and CEO Jose Teodoro “TG” Limcaoco warning that weaker economic conditions are driving up provisions even as revenues remain robust.
First-half net income slipped 0.4% to ₱32.8 billion, as provisions surged 84% to ₱13.3 billion .
Limcaoco said the increase reflects a softer macroeconomic backdrop rather than a rise in bad loans. “Even though NPL isn’t rising, but because economic conditions are less positive, you have to put more. That’s just what the model says,” he noted.
The bank’s nonperforming loan ratio held steady at 2.42% at end-June, unchanged from the first quarter. Limcaoco expects the ratio to stay broadly flat through year-end, though he acknowledged some deterioration in parts of the consumer portfolio. “Times are a little tougher. So we’re tightening credit standards and we’re also beefing up collection,” he said.
Despite the cautious tone, BPI remains positive on lending, projecting loan growth in the low teens. The loan book expanded 12.4% year-on-year to ₱2.7 trillion in the first half.
Limcaoco said the earnings trajectory will hinge on infrastructure spending, inflation expectations, and monetary policy.
He sees at least one more Bangko Sentral ng Pilipinas rate hike this year, likely in August or the following meeting, but ruled out a 50-basis-point increase in one move.
“My guess is they’ll probably hike rates either in August or the one after. I don’t see them hiking rates 50 basis points in one blow,” he said.
