Bank lending standards seen steady in fourth quarter

A higher percentage of banks expect lending standards to remain unchanged for businesses and households in the fourth quarter of 2025, according to the Bangko Sentral ng Pilipinas (BSP).

The central bank’s latest Senior Bank Loan Officers’ Survey (SLOS), which covered 58 bank respondents, showed that most lenders anticipate steady loan policies in the coming months.

For business loans, 86 percent of surveyed banks expect to maintain their lending standards, up from 78.9 percent in the previous quarter.

The remaining respondents were split between easing at 3.5 percent and tightening at 10.5 percent.

Similarly, 87.5 percent of banks expect to maintain lending standards for household loans, higher than 77.5 percent in the third quarter.

About 10 percent expect to tighten standards, while 2.5 percent may ease them.

Lending standards refer to the criteria banks use in evaluating loans, including interest rates, collateral requirements, loan sizes, repayment terms, and other conditions.

Among banks anticipating a change, a net 7 percent expect to tighten rather than loosen credit standards for business loans, while a net 7.5 percent expect tightening for household loans.

The BSP said these results indicate that any adjustments in lending rules for the remainder of the year will likely favor tighter, rather than more relaxed, credit conditions.

In comparison, the previous quarter saw a net tightening of 17.5 percent for business loans and 7.5 percent for household loans.

For the fourth quarter, 73.7 percent of banks expect loan demand from businesses to remain steady, slightly lower than 75.4 percent in the third quarter.

About 24.6 percent of banks project an increase in loan demand, up from 19.3 percent in the previous quarter, while only 1.8 percent foresee a decline.

For household loans, 65 percent of banks expect demand to stay unchanged, compared to 75 percent in the third quarter.

Meanwhile, 25 percent of banks anticipate higher demand from households, up from 17.5 percent previously, while 10 percent expect weaker demand.

The BSP’s SLOS gathers quarterly insights from senior loan officers to assess how banks perceive changes in credit conditions, both in terms of lending standards and loan demand.

The latest survey, conducted from Sept. 11 to Oct. 21, 2025, achieved a 96.7 percent response rate, with 58 out of 60 banks participating.

The BSP said stable lending standards reflect the banking sector’s cautious optimism amid moderate inflation, improving business confidence, and manageable credit risk in the domestic financial system.