MOST Philippine banks expect to keep their lending standards unchanged in the third quarter of 2026, signaling continued stability in the banking system despite geopolitical uncertainties, according to the Bangko Sentral ng Pilipinas’ latest Senior Bank Loan Officers’ Survey.
The survey showed that 75.5 percent of respondent banks expect no change in credit standards for enterprise loans in the July-to-September period, while 80 percent anticipate unchanged standards for household loans. Both figures were higher than in the second quarter, indicating a broader expectation of stable lending conditions.
The BSP said the results suggest banks remain prudent in assessing credit risks while retaining their capacity to support economic activity through lending.
Among banks expecting changes, fewer respondents projected tighter credit standards for both business and consumer loans compared with the previous quarter. A small number of banks also expect to ease lending standards for enterprise loans.
Using the survey’s diffusion index method, banks continued to show a net tightening bias for both enterprise and household loans, although the BSP noted the overall outlook remained broadly stable. Respondents cited a less favorable or more uncertain economic outlook, lower risk tolerance and a weaker borrower profile as reasons for maintaining a cautious stance.
The survey also pointed to stronger loan demand in the third quarter.
About 64.2 percent of banks expect demand for enterprise loans to remain unchanged, while 30.2 percent foresee an increase and 5.7 percent expect demand to decline. Compared with the previous quarter, more banks projected higher demand, driven by increased inventory financing requirements, greater accounts receivable financing needs and an improving business outlook.
Banks also expect stronger demand for household loans, citing higher consumer spending, limited alternative funding sources, increased housing investment and more attractive bank financing terms. / KOC