Philippine banks expect stronger loan demand from businesses and households in the third quarter while keeping lending standards broadly unchanged, signaling continued support for credit growth despite geopolitical uncertainty.
The Bangko Sentral ng Pilipinas’ Senior Bank Loan Officers’ Survey showed 30.2% of respondent banks expect demand for enterprise loans to increase in the third quarter, up from 17.0% in the previous survey. The share expecting demand to remain unchanged fell to 64.2% from 73.6%, while those anticipating weaker demand declined to 5.7% from 9.4%.
“Compared with Q2 2026, fewer banks expect demand to remain unchanged or decline, while more expect it to increase,” the BSP said.
The central bank attributed the expected rise in business loan demand to higher inventory and accounts receivable financing needs, as well as an improved economic outlook among borrowers.
Banks were also more optimistic about household lending. The proportion expecting household loan demand to increase rose to 31.4% from 11.4%, while those expecting demand to remain unchanged fell to 57.1% from 74.3%. Respondents expecting weaker demand declined to 11.4% from 14.3%.
“Banks expecting higher household loan demand cited stronger household consumption, lack of other sources of funds, higher housing investment, and more attractive bank financing terms as the key drivers,” the BSP said.
The survey also showed banks largely expect to maintain existing lending standards in the third quarter. About 75.5% of respondents expect no change in credit standards for enterprise loans, while 80.0% anticipate stable standards for household lending.
“These are improvements from the responses in Q2 2026, when a smaller percentage of banks noted unchanged credit standards,” the BSP said.
A smaller number of banks expect to tighten credit standards for both enterprise and household loans, while a few respondents anticipate easing standards for enterprise lending.
The survey’s diffusion index remained positive for both business and household loans, indicating an overall tightening bias. Banks cited a less favorable economic outlook, lower risk tolerance and weaker borrower profiles as factors that could lead them to tighten credit standards.
Outstanding loans of universal and commercial banks rose 12.1% year on year to P14.99 trillion at the end of May, the BSP said separately. Credit growth accelerated for a fourth straight month from 11.4% in April, marking its fastest pace in more than a year.
