Most banks in the Philippines expect to maintain existing lending standards in the second quarter of 2026, signaling continued credit support for the domestic economy despite global uncertainties linked to the Middle East conflict.
The latest Bangko Sentral ng Pilipinas (BSP) Senior Bank Loan Officers’ Survey (SLOS) showed most banks plan to keep current credit assessment standards for both business and household borrowers.
For business loans, 61.5 percent of respondent banks said they expect lending standards to remain unchanged in Q2, while 30.8 percent expect tighter standards and 7.7 percent expect easing. This compares with Q1, when 71.2 percent expected standards to stay the same, 26.9 percent expected tightening, and 1.9 percent expected easing.
For household loans, 65.7 percent of banks said they expect no change in lending standards, while 28.6 percent foresee tighter rules and 5.7 percent expect easing. In the previous quarter, 77.8 percent expected unchanged standards, 16.7 percent anticipated tightening, and 5.6 percent projected easing.
Under the BSP’s modal method, which tracks the dominant response, most banks still expect lending standards to remain steady for both sectors.
Using the diffusion index method, which measures the gap between banks expecting tighter standards and those expecting easing, business loans posted a 23.1 percent net tightening outlook, while household loans showed a 22.9 percent net tightening expectation.
Banks also expect loan demand to stay largely stable in Q2.
For enterprises, 53.8 percent of banks said demand would likely remain unchanged, while 34.6 percent expect higher demand and 11.5 percent foresee weaker demand. For households, 52.9 percent expect stable demand, while 23.5 percent each expect either an increase or a decrease.
By diffusion index, banks project a 23.1 percent net increase in business loan demand, while household loan demand is expected to post zero net growth.
The survey suggests banks remain cautious but broadly supportive of lending activity as businesses and consumers navigate economic pressures. PR
