What are your findings?

1. The study revealed that the profile of selected commercial banks in the Philippines in terms
of years of operation, among the seven commercial banks, 3 of them were operating for 40 and above
years and the other 3 were operating for 20-39 years while 1 of them was operating for less than 20
years. Overall, the mean years in operation was 41.8571 years, and the standard deviation was 24.07231
years. Meanwhile, in terms of asset size, the study found that among the seven commercial banks, 3 of
them have an asset size greater than ₱100 billion, while 2 of them have an asset size greater than ₱50
billion but less than ₱100 billion, and the other 2 have an asset size of less than ₱50 billion. Overall, the
mean asset size was ₱87,580,011,657 and the standard deviation was ₱54,324,486,989.72.

2. In the area concerned with the profitability of the commercial banks, the result revealed that in
terms of return on assets of the commercial banks, there was an increase from 2018 to 2019 but had a
drastic decrease in 2020. In 2018, the mean of the commercial banks was 0.0025, then it increased to
0.0108 in 2019, but in 2020 it decreased to 0.0069. Overall, the mean ROA was 0.0067 and the standard
deviation was 0.0089. In terms of the Return on equity of the commercial banks, there was an increase
from 2018 to 2019 but had a drastic decrease in 2020. In 2018, the mean of the commercial banks was
0.0114, then it increased to 0.0818 in 2019, but in 2020 it decreased to 0.0335. Overall, the mean ROE
was 0.0422 and the standard deviation was 0.0838. In terms of the net interest margin of the
commercial banks, there was a slight increase from 2018 to 2020, and obtained a positive net interest
margin in three years. In 2018, the mean of the commercial banks was 0.0336, then it increased to
0.0384 in 2019, and in 2020 to 0.0407. Overall, the mean NIM was 0.0375 and the standard deviation
was 0.0103.
3. In the area concerned with the profitability of the commercial banks, the result revealed that in
terms of Liquidity coverage ratio the commercial bank, obtained an increasing liquidity coverage ratio in
three years and exceeded the prescribed minimum ratio of 100 percent. In 2018, the mean of the
commercial banks was 1.3031, then it increased to 1.5517 in 2019, and in 2020 to 2.2805. Overall, the
mean of LCR was 1.7118 and the standard deviation was 0.8368.
4. When comparing the means of profitability of the commercial banks in the Philippines when
grouped according to years in operation the result revealed that the return on assets of commercial
banks who operate for less than 20 years has the highest mean of 0.0120, followed by 20-39 years has a
mean of 0.0091 and 40 and above years has a mean of 0.0026. In terms of Return on equity of
commercial banks that operate for 20-39 years have the highest mean of 0.0664, followed by less than
20 years has a mean of 0.0433, and 40 and above years has a mean of 0.0177. In terms of net interest
margin, commercial banks that operate for 40 and above years have the highest mean of 0.0418,
followed by 20-39 years have a mean of 0.0357 and less than 20 years have a mean of 0.0303. On the
other hand, the result revealed that when comparing the means of profitability of the commercial banks
in the Philippines when grouped according to asset size, the return on assets, commercial banks with
less than ₱50 billion asset size have the highest mean of 0.0147, followed by ₱100 billion and above
asset size has a mean of 0.0060, and ₱50 billion but less than ₱100 billion asset size has a mean of -
0.0001. In terms of return on equity, commercial banks with less than ₱50 billion asset size have the
highest mean of 0.0850, followed by ₱100 billion and above asset size has a mean of 0.0535, and ₱50
billion but less than ₱100 billion asset size has a mean of -0.0176. In terms of net interest margin,
commercial banks with ₱50 billion but less than ₱100 billion asset size have the highest mean of 0.0484,
followed by ₱100 billion and above asset size has a mean of 0.0381, and less than ₱50 billion asset size
has a mean of 0.0258.
5. When comparing the means of liquidity of the commercial banks in the Philippines when grouped
according to years in operation the results revealed that, the Liquidity coverage ratio of commercial
banks who operate for less than 20 years has the highest mean of 2.4523, followed by 40 and above
years has a mean of 1.8383 and 20-39 years have a mean of 0.0303. On the other hand, the result
revealed that when comparing the means of liquidity of the commercial banks in the Philippines when
grouped according to Asset size, the Liquidity Coverage Ratio, commercial banks with ₱50 billion but less
than ₱100 billion asset size has the highest mean of 1.8923, followed by less than ₱50 billion asset size
has a mean of 1.8607, and ₱100 billion and above asset size have a mean of 1.4922.
6. Regarding the significant impact of the liquidity on the profitability of commercial banks the results
revealed that the computed r coefficient for net interest margin is -0.247 verbally interpreted as having
a weak positive effect on liquidity coverage ratio. While both return on assets and return on equity with
computed r coefficients of -0.231 and -0.496, revealed a weak and moderate negative effect on liquidity
coverage ratio, respectively. Additionally, the probability indicators namely return on assets (ROA),
return on equity (ROE), and net interest margin (NIM) have no significant effect on the liquidity coverage
ratio at the level of 5% significance.
7. Based on the result of the study, the researcher proposed Instructional, Educational, and
Communication materials specifically targeting those interested in the impact of liquidity on the
profitability of selected commercial banks in the Philippines. The proposed IEC was developed to help
commercial banks in the Philippines the relationship between liquidity and profitability, and give
strategies to enhance both liquidity and profitability.

How would you relate your findings to existing theories on the study?

1. The finding in sop 1 was similar to the study of Aziz & Samad (2016), wherein the years in operation
were defined and measured as the significant period since its foundation, and according to Esteve-Pérez
et al. (2017) it was a major factor of business survival. Sritharan (2015), wherein asset size refers to the
ability, the variety, and the number of production capacities or the amount and multiplicity of services
or transactions banks can offer concurrently to their clients and according to Mester (2010) increasing
banks’ asset size can reduce risk by diversifying operations across
product lines, sectors, and regions.

2. The finding in sop 2 was similar to the study of Al-Qudah (2016), where he defined that Return on
assets (ROA) is used to measure a bank's capacity to benefit from its asset management activities while
Return on equity (ROE) is used measure of how well management uses equity but financing to finance
operations and expand the company, on the other hand, Silaban (2017) defined that net interest margin
is regarded as an indicator of a bank’s ability to earn interest income by taking into account its ability to
disburse loans, given that the operating income of a bank is mainly dependent on the difference
between interest and credit disbursed. Furthermore, McClure (2020) argues that the rising return on
asset (ROA) over time indicates that the bank is doing a good job of maximizing earnings for each peso
invested. On the other hand, a decrease in ROA indicates that the bank is in trouble because of too
much investment in its assets that failed to yield revenue growth while Lalonde (2021) argues that a
growing ROE indicates that a corporation is generating more profits while using less capital, on the other
hand, Buchory (2014), argues that a higher net interest margin may indicate that the bank has potential
advantages from the difference between interest revenue and earnings.

3. The finding in sop 2 was similar to the study of (Morales, 2021), wherein he denied that the Liquidity
Coverage Ratio is measured as the proportion of high-quality liquid assets to
total net cash outflow. Furthermore, the EBA 2013 and Cucinelli 2013, argue that organizations with a
high LCR will not be required or incentivized to make unnecessary changes to their
business model.
4. The finding for sop 4 when the profitability of commercial banks was grouped according to years in
operation the result in terms of ROA was similar to Dietricha and Wanzenriedb (2009), they argue that
the years in operation do not have a significant impact on banking profitability and older banks are not
more lucrative than banks established in a recent year while in terms o ROE the study of Sulub (2014)
reveals that there was a weak negative relationship between the bank's years in operation and Return
on equity, on the other hand, Coad et al. (2013) indicates that older firms outperform younger firms in
terms of net interest margin because they have more experience and benefit from "learning by doing".
When the profitability of commercial banks was grouped according to asset size the result in terms of
RO is similar to EduPristine (2018), wherein though a high ROA indicates that the firm is performing well
in terms of finance and operations there are instances that a bank will obtain low ROA while in terms of
ROE, Fernando (2021), a slightly above-average ROE is preferred over one that is twice, thrice, or even
more than the group's average, on the other hand, Tarusa, et.al. (2012), argues that the greater
efficiency of a competitive
the banking system is manifested in low to average net interest margin.

5. The findings for sop 5 when the liquidity of commercial banks was grouped according to years in
operation and asset size the result in terms of LCR found no indication of a relationship between years in
operation and liquidity according to Vu et al. (2020) and Quinones (2015).

6. The findings for sop 6 revealed that liquidity does not have a significant effect on the profitability of
commercial banks similar to the study by Durand (2019), wherein he found that regulatory ratios do not
impose any binding constraints on a bank's performance as evidenced by LCR having little impact on
profitability. Moreover, the return on assets has no statistically significant relationship to liquidity, as
proved by Idowu and Adegboyega (2017) in their evaluation of the relationship between liquidity and
bank performance in Nigeria. The result of the study is in contrast to the study of Adebayo et al. (2011)
which indicates that there is a positive relationship between liquidity and profitability. The result is also
contrary to the study of Ayodele and Oke (2013) which found out that there is a strong correlation
between bank liquidity and profitability.

What are the contributions (to knowledge) of your thesis?

This study contributes to our understanding of some related constructions that have not been explored
in-depth in previous literature relating to the liquidity and profitability o commercial banks specifically in
the Philippines. Hence, helping in developing a better understanding of the impact of liquidity using LCR
on profitability through ROA, ROE, and NIM is the key contribution of this study. In this regard, the
findings of the study demonstrate that liquidity has no significant impact on the profitability of the
banks (Adegboyega, 2017) (Durand, 2019). On the contrary, liquidity has a strong positive impact on the
profitability of commercial banks (Adebayo et al., 2011) (Ayodele and Oke, 2013).

What is the implication of your work in your area? What does it change?

Our study implies that the liquidity of the commercial banks in the Philippines does not have a
significant impact on their profitability. Further, the ROA and ROE have a weak and moderate negative
relationship with LCR, respectively. While NIM has a weak negative relationship with LCR. The
commercial banks in the Philippines should still consider improving their LCR if they aim to increase their
NIM but if they aim to increase their ROA and ROE, they reduce their LCR and maintain it to its minimum
requirement which is 1.00.
Based on your findings what are your recommendations?
1. Apply the proposed theories and strategies to enhance the profitability and liquidity of commercial
banks.
2. Explicated the impact of liquidity on commercial bank profitability's information and educational
components. Develop instructional materials that include the impact of liquidity on commercial bank
profitability as well as strategies to enhance commercial bank liquidity and profitability.
3. The study's findings must be shared with the respective commercial banks. It is expected that doable
recommendations would be followed. Other banks may use as well as create techniques to improve
commercial banks' liquidity and probability.
4. Focus on improving indicators of probability and liquidity of commercial banks to help users of
information like shareholders and depositors decide whether to deposit or withdraw their investments.
5. Future researchers are encouraged to conduct further studies that would expand the knowledge on
the impact of liquidity on the profitability of commercial banks in the Philippines. More commercial
banks as respondents and covering a longer time frame were proposed to deeply analyze and
understand the impact of liquidity on the profitability of commercial banks in the Philippines.