PHILIPPINE National Bank (PNB) is considering a bond issuance next year to support potential loan expansion, although the timing, size and currency of the offering have yet to be determined.
PNB President and CEO Edwin Bautista said the bank had no immediate funding requirement for the rest of the year, as existing deposits remained sufficient to support loan growth.
“We can still grow it enough. Our deposits are enough to fund the loan growth,” he told reporters.
Bautista said the bank could issue either peso- or US dollar-denominated bonds, depending on the size of the offering and market conditions. Larger issuances would tend to be directed toward overseas markets, where, he said, PNB had received favorable investor interest.
The bank prefers longer-term funding, but the timing will depend partly on interest rate movements.
Bautista said no issuance had been scheduled for next year and stressed that the bank was not under pressure to raise funds immediately.
“Actually, we need it longer,” he said, referring to the tenor of any proposed issuance, noting that prevailing interest rates also remained a consideration.
PNB also has room under its existing sustainability bond program, including in the US dollar market, Bautista said.
The bank’s funding plans come as it continues to expand its loan portfolio. Bautista said loan growth stood at about 15 percent, below the bank’s internal target but still among the highest growth rates in the industry.
“Our loan growth came out about 15 percent. And my budget there is higher than 15 percent,” he said.
For the first quarter of 2026, PNB reported loan growth of 15 percent year on year and the pace settled at 10 percent for the first half to P764 billion. The bank’s net income for the first six months stood at P14.6 billion, up 17 percent from a year earlier.
Bautista expects loan growth for the full year to remain in double-digit territory, supported by its business-focused loan portfolio and strong deposit base.
He said PNB’s capital-to-deposit ratio was approaching 20 percent, indicating that the bank had substantial capital relative to its deposit base.
He explained that expanding the balance sheet would require the bank to deploy capital and secure funding to support additional lending.
“Normally, what banks do, it’s going to be a mix, right? They go to the capital, to the bond market partly, and partly through better time deposit rates,” he said.
On interest rates, Bautista said market rates had largely priced in the possibility of another Bangko Sentral ng Pilipinas (BSP) rate hike in October.
He said the size of any adjustment remained uncertain, with a 25-basis-point increase among one of the possibilities.
He added that rate increases implemented earlier in the year had already been absorbed into the bank’s lending rates, while the potential impact of another adjustment remained a consideration.
On asset quality, Bautista said PNB’s nonperforming loan (NPL) ratio had improved from about 6 percent three years ago and could move closer to the industry average this year.
For the first six months of the year, PNB’s gross NPL ratio stood at 4.2 percent, down from 5.5 percent a year ago.
Bautista cautioned against treating a high NPL coverage ratio as an automatic indicator of stronger asset quality, saying it could reflect provisions for loans that were already past due but had not yet been classified as nonperforming.
Consumer lending accounts for about 8 percent of PNB’s total loan book, with the remaining 92 percent consisting of other lending segments, Bautista said. A big portion of the consumer portfolio is secured, including mortgage loans, while credit cards account for a relatively small share.
The bank had sought to expand consumer lending because of its contribution to net interest margins, but Bautista said it was now deliberately slowing credit card expansion amid signs of increasing pressure in the consumer lending market.
He said PNB’s longer-term goal of increasing consumer loans to 15 percent of its portfolio would depend on market conditions and borrowers’ capacity to repay, rather than a fixed deadline.
The bank’s shares on Friday closed at P76.20, up by P2.40, or 3.25 percent.
