Philippine banks resist easing loans as demand rises

Only 1.9% of lenders plan to relax business credit requirements in Q4 2026.

The share of Philippine banks expecting to tighten lending standards for businesses fell to 17.3% in the fourth quarter of 2026 from 28.8% in the previous quarter, according to the Bangko Sentral ng Pilipinas (BSP).

For household loans, the proportion of banks anticipating tighter lending requirements declined to 11.4% from 17.1%, the central bank's third-quarter Senior Bank Loan Officers' Survey showed.

Most banks expect to maintain their current lending standards, with 80.8% anticipating no change for business loans, up from 71.2% in the third quarter.

For household loans, 85.7% expect lending requirements to remain unchanged, compared with 77.1% previously.

Only 1.9% of banks expect to ease lending standards for businesses, whilst 2.9% anticipate easing requirements for households.

Banks considering tighter lending standards cited uncertainty over the economic outlook, worsening borrower profiles and reduced willingness to take risks.

Meanwhile, more banks expect loan demand to increase in the fourth quarter.

For business loans, 26.9% of banks anticipate stronger demand, up from 19.2% in the previous quarter. Another 69.2% expect demand to remain unchanged, whilst 3.8% anticipate a decline.

The expected increase in business borrowing reflects greater financing needs for inventories and unpaid customer bills, as well as limited access to other funding sources.

Household loan demand is also expected to strengthen, with 37.1% of banks anticipating an increase, compared with 20% in the third quarter.

Meanwhile, 60% expect household loan demand to remain unchanged, whilst 2.9% anticipate a decline.

Banks attributed the expected increase in household borrowing to higher consumer spending, more attractive loan terms and increased investment in housing.

The BSP surveyed 60 banks and received responses from 55, representing a 91.7% response rate.

The survey, conducted from 2 September to 6 October 2026, covered universal and commercial banks, thrift banks and rural banks in the Philippines.