Fadzlan Sufian¹,²* and Royfaizal Razali Chong¹

¹Department of Economics, Faculty of Economics and Management
Universiti Putra Malaysia, 43400 Serdang, Selangor, Malaysia
²Khazanah Research and Investment Strategy, Khazanah Nasional Berhad, Malaysia

*Corresponding author: fadzlan.sufian@khazanah.com.my

The present paper seeks to examine the determinants of Philippines banks profitability during the period 1990–2005. The empirical findings suggest that all the bank-specific determinant variables have a statistically significantly impact on bank profitability. The empirical findings suggest that size, credit risk, and expense preference behaviour are negatively related to banks' profitability, while non-interest income and capitalisation have a positive impact. During the period under study, the results suggest that inflation has a negative impact on bank profitability, while the impact of economic growth, money supply, and stock market capitalisation have not significantly explained the variations in the profitability of the Philippines banks.