BSP sees steady bank lending standards in Q3 2025

Most Philippine banks plan to maintain lending standards for businesses and households in the third quarter of 2025, according to the Bangko Sentral ng Pilipinas’ latest Senior Bank Loan Officers’ Survey.

The Q2 2025 SLOS results, published by the BSP, showed that 91.1 percent of respondent banks expect no change in credit standards for enterprise loans—up from 82.1 percent in the second quarter.

Similarly, 85.0 percent of banks said they will likely maintain current lending standards for household loans, a slight increase from 82.5 percent in the previous quarter.

The SLOS survey tracks expectations and actual lending behavior among bank loan officers, capturing shifts in credit terms such as required income, collateral, interest rates, loan size, and repayment conditions.

While the majority foresee stable lending terms, the data also indicated mild tightening pressures.

Among banks anticipating changes, a net tightening of 5.4 percent is expected for business loans and 5.0 percent for household loans.

This is a noticeable easing compared to the second quarter, when net tightening stood at 14.3 percent and 12.5 percent, respectively.

LOANS FOR ENTERPRISES

Under the diffusion index approach used by the BSP, a positive net tightening indicates that more banks expect to tighten than ease lending standards.

On the demand side, 75.0 percent of banks reported steady business loan demand in Q2, while 19.6 percent noted an increase and 5.4 percent observed a decline.

Looking ahead, 71.4 percent of banks expect business loan demand to remain flat in Q3, 26.8 percent foresee an increase, and only 1.8 percent anticipate a decrease.

LOANS FOR HOUSEHOLDS

In terms of household credit demand, 77.5 percent of respondents reported no change in Q2, 12.5 percent saw an increase, and 10.0 percent saw a decline.

By the third quarter, 72.5 percent of banks predict unchanged household loan demand, with the remaining 27.5 percent expecting it to rise.

No bank foresees a drop in consumer credit demand during the coming quarter.

The BSP said the survey findings reflect a more cautious but stable credit environment as inflation moderates and economic recovery gains pace.

Bank lending behavior is a key indicator monitored by the BSP to assess the transmission of monetary policy and the resilience of credit markets.

Despite signs of net tightening, the higher proportion of banks keeping standards unchanged may support steady credit growth and private sector financing in the months ahead.

The BSP conducts the SLOS quarterly to assess shifts in credit standards, loan demand, and the general outlook of Philippine banks.