Philippine National Bank (PNB) expects to sustain double-digit growth in the second half, banking on its low-cost deposits and business-focused loan portfolio to cushion the impact of higher interest rates.
PNB president and CEO Edwin Bautista said the bank’s strong first-half performance had carried into the succeeding months, although he could not give a growth rate forecast.
‘But so far the trend continues,’ Bautista said. ‘The numbers, the growth rates are going to be very similar.’
PNB’s net income reached P14.6 billion in the first six months of 2026, up by about 17 percent from P12.5 billion in the same period last year.
Bautista said PNB’s high current account and savings account ratio, supported by its extensive branch network, should help keep funding costs relatively stable as interest rates rise.
‘Our cost of funds is steady. Even if interest rates rise, only a small portion of our deposits consists of time deposits that would require higher interest payments. So our cost of funds will remain relatively stable,’ he said.
Meanwhile, higher benchmark rates could allow PNB to charge more on loans, potentially improving its lending margins.
Higher rates, however, could also weigh on the value of its bond portfolio and result in net unrealized losses that would affect capital, Bautista said.
He stressed that PNB remained exposed to this risk, but its capital adequacy ratio of about 20 percent provided a substantial buffer.
‘The difference is our buffer is so fat that it will hardly matter,’ he said.
On credit risk, Bautista said higher interest rates and inflation could strain borrowers’ finances and lead to more past-due loans.