BSP Survey Shows Banks Expect Stronger Loan Demand in Fourth Quarter

 

Philippine banks are anticipating increased borrowing activity from businesses and households in the final quarter of 2026, while showing a reduced inclination to impose stricter lending requirements, according to the Bangko Sentral ng Pilipinas (BSP).

The latest Senior Bank Loan Officers’ Survey (SLOS) points to improving credit demand, particularly among consumers, as financial institutions prepare for higher financing requirements toward the end of the year.

Banks Maintain Lending Standards

Most surveyed banks expect to keep their existing credit policies in place during the October to December period. For business loans, 80.8 percent of respondents anticipate no changes to their lending standards, up from 71.2 percent in the third quarter.

The outlook is similarly stable for household financing, with 85.7 percent of banks expecting to maintain current requirements, compared with 77.1 percent in the previous survey.

The declining proportion of banks planning to tighten credit conditions further reinforces this trend. Among business lenders, the share expecting stricter requirements dropped to 17.3 percent from 28.8 percent. Only 1.9 percent anticipate easing their standards, compared with none in the previous quarter.

For household loans, 11.4 percent of banks expect tighter lending policies, down from 17.1 percent. Meanwhile, the proportion anticipating more relaxed requirements also declined, falling to 2.9 percent from 5.7 percent.

Despite the generally stable outlook, banks remain cautious about potential economic headwinds. Uncertainty surrounding economic conditions, weakening borrower credit profiles and limited appetite for lending risks remain among the factors that could trigger tighter approval requirements.

Business Borrowing Appetite Shows Signs of Improvement

The survey also indicates a gradual recovery in demand for corporate financing.

While 69.2 percent of banks expect business loan demand to remain broadly unchanged, the proportion anticipating an increase climbed to 26.9 percent from 19.2 percent in the previous quarter. Conversely, only 3.8 percent expect demand to weaken, down from 5.8 percent.

The BSP identified higher working capital requirements as a major contributor to the expected increase. Businesses may need additional financing to replenish inventories and cover accounts receivable, particularly when payments from customers are delayed.

Limited availability of alternative funding options could also push more companies toward traditional bank financing.

These developments suggest that businesses may increasingly rely on credit to support day-to-day operations, manage cash flow and sustain commercial activity.

Consumer Loan Demand Expected to Accelerate

Household borrowing presents an even stronger growth outlook.

The percentage of banks expecting higher demand for consumer loans nearly doubled to 37.1 percent in the fourth quarter from 20 percent in the previous survey.

Meanwhile, 60 percent anticipate household loan demand to remain stable, compared with 71.4 percent previously. Just 2.9 percent foresee a decline, a notable improvement from the previous quarter's 8.6 percent.

Banks attributed the anticipated increase to stronger consumer spending, more competitive financing conditions and greater investment in residential properties.

More attractive lending terms could encourage households to pursue major purchases and property-related financing, while increased consumer activity may support demand for other forms of personal credit.

Survey Covers 55 Philippine Banks

The BSP conducted the latest survey from September 2 to October 6, collecting responses from 55 of the 60 banks invited to participate.

The quarterly assessment covers universal and commercial banks, thrift banks and rural banks. It monitors changes in lending policies and financial institutions' expectations regarding credit demand.

Although the survey does not guarantee that projected borrowing activity will materialize, it provides an important indication of how banks perceive the direction of credit conditions.

The latest findings present a cautiously positive picture for the Philippine banking sector. With fewer institutions anticipating tighter lending policies and more expecting increased borrowing activity, access to financing could become more supportive of business operations and household spending in the final months of 2026.