BDO, BPI investment-grade ratings affirmed by Moody’s

Title Moody's Affirms Investment-Grade Ratings for BDO and BPI A Tes
Testament to their Strong Fundamentals

The Philippine banking sector has received a boost with Moody's affirmation
affirmation of investment-grade ratings for Bank of the Philippine Islands 
(BPI) and BDO Unibank. In separate statements, Moody's affirmed both banks'
banks' long-term and short-term local and foreign currency deposit ratings 
at Baa2/P-2.

Moody's cited the banks' solid balance sheets, dominant market positions, a
and resilient profitability as key factors behind their ratings. The debt w
watcher highlighted BDO's good asset quality, strong funding and liquidity
liquidity, as well as good profitability and adequate capital as key drive
drivers of its rating affirmation. Similarly, Moody's noted that BPI's rati
ratings were supported by strong profitability, adequate capital, healthy 
liquidity, and stable funding supported by its solid deposit franchise.

BDO Unibank Moody's praised BDO for its dominant deposit franchise, which 
has supported low-cost funding and strong liquidity metrics. The bank's non
nonperforming loan ratio improved to 1.7 percent at end-2025 from 1.9 perce
percent a year earlier, supported by higher write-offs from rapidly growing
growing unsecured retail loans. However, the bank's gross credit costs rose
rose to 0.65 percent in the first quarter of 2026 from 0.44 percent in full
full-year 2025 due to preemptive provisioning amid more challenging macroec
macroeconomic conditions and the growing share of retail loans.

Bank of the Philippine Islands (BPI) Moody's noted that BPI's ratings were
were supported by strong profitability, adequate capital, healthy liquidit
liquidity, and stable funding supported by its solid deposit franchise. Ho
However, the agency flagged worsening asset quality due to rapid growth in 
higher-risk retail loans and emerging pressures in the corporate segment. B
BPI's bad loans ratio had increased to 3.4 percent at end-2025 from 3.1 per
percent a year earlier, while gross credit costs climbed to 0.75 percent fr
from 0.32 percent.

Outlook and Risks Moody's expects BDO's profitability to remain at around 
1.4 percent to 1.5 percent this year as credit costs and operating expenses
expenses stay elevated. The agency also warned that BDO's high exposure to 
large corporate loans and long-dated investment securities could continue t
to pose risks to asset quality. For BPI, Moody's said the bank's profitabil
profitability would likely remain strong, but flagged emerging pressures in
in the corporate segment and continued strain on retail borrowers amid high
higher inflation in the Philippines.

Conclusion The affirmation of BDO and BPI's investment-grade ratings by Mo
Moody's is a testament to their strong fundamentals and ability to withstan
withstand rising risks in the market. While there are concerns about asset 
quality and credit costs, both banks have demonstrated resilience and stron
strong profitability. The outlook for the Philippine banking sector remains
remains stable, with no upgrades expected unless the country's sovereign ra
rating is raised.

In this blog post, we will explore the importance of Moody's ratings in the
the context of the Philippine banking sector. We will also discuss the impl
implications of these ratings for investors and the broader economy.

Keywords BDO Unibank, Bank of the Philippine Islands (BPI), Moody's, i
investment-grade ratings, credit costs, asset quality, profitability, Phili
Philippines

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.