Moody’s affirms ratings of 3 Philippine banks

MANILA, Philippines — Moody’s Ratings has affirmed the ratings of three major banks in the Philippines despite rising global and domestic risks brought about by escalating tensions in the Middle East.

The affirmation of the Baa2 investment-grade ratings of China Banking Corp., Philippine National Bank (PNB) and Security Bank Corp. signals continued resilience in the financial system.

The credit rating agency also maintained a stable outlook for the three banks, reflecting expectations that their credit profiles will remain broadly steady over the next 12 to 18 months.

For Chinabank, Moody’s said the rating affirmation “reflects our expectation that the bank’s credit profile will remain broadly stable over the next 12 to 18 months,” supported by strong capitalization, although asset quality is seen to weaken slightly due to retail loan seasoning, rising living costs and the impact of the flood-control probe.

The bank’s nonperforming loan ratio stood at 1.6 percent as of end-2025, while its tangible common equity ratio rose to 17.4 percent.

PNB, meanwhile, was cited for its “robust capitalization and strong profitability,” with return on assets improving to 1.9 percent in 2025 from 1.7 percent a year earlier.

Moody’s also highlighted PNB’s strong funding profile, with a 75-percent CASA ratio and liquidity coverage ratio of 260 percent, the highest among its rated domestic peers.

Security Bank’s outlook was revised to stable from negative, as “the negative pressure on the bank’s capitalization has abated amid much slower credit growth.”

Still, Moody’s expects asset quality across banks to weaken modestly over the next one to two years, reflecting retail loan seasoning, higher borrowing costs and lingering effects of the flood-control investigation.

Across the banking sector, the ratings agency maintained that Philippine banks remain well-capitalized and supported by a stable operating environment, even as credit costs rise and profitability moderates.