BSP survey sees steady credit, stronger Q4 loan demand

MANILA — Most Philippine banks expect lending standards to hold steady in the fourth quarter of 2026, while more anticipate stronger borrowing from businesses and households, the Bangko Sentral ng Pilipinas said Friday.

Stable standards could keep access to bank credit from tightening further for qualified families and firms. Positive diffusion indexes, however, show that banks still lean toward tighter rules even as loan demand strengthens.

The BSP based the outlook on its third-quarter Senior Bank Loan Officers’ Survey, which gathered responses from 55 of 60 banks from Sept. 2 to Oct. 6, 2026. The 91.7 percent response rate covered universal and commercial banks, thrift banks and rural banks.

The survey tracks quarter-on-quarter changes in loan officers’ views of their banks’ credit standards and the factors affecting loan supply and demand for enterprises and households.

For the fourth quarter, 80.8 percent of respondents expect enterprise credit standards to remain unchanged, up from 71.2 percent in the third quarter.

Another 85.7 percent expect household credit standards to stay unchanged, compared with 77.1 percent in the third quarter.

Table 1  Banks’ responses on credit standards in percent

Among banks expecting a change, the tightening bias weakened for both enterprise and household loans, while a small share expects to ease standards.

The modal approach identifies the response selected by most banks. The diffusion index subtracts the share expecting easing from the share expecting tightening, so a positive result indicates net tightening.

Table 2  Credit standards diffusion indexes in percent

Banks cited uncertainty over the economic outlook, weaker borrower profiles and lower risk tolerance as factors that could produce tighter standards.

Banks also expect overall loan demand to remain steady in the fourth quarter, with a larger share anticipating stronger demand.

For enterprise loans, 69.2 percent expect demand to remain unchanged, 26.9 percent expect an increase and 3.8 percent expect a decline.

The corresponding enterprise demand diffusion index rises to 23.1 percent from 13.5 percent in the third quarter and 7.5 percent in the second quarter.

Table 3  Enterprise loan demand in percent

Banks linked the expected increase in enterprise borrowing to higher financing needs for inventories and accounts receivable and limited access to other funding sources.

For household loans, 60 percent expect demand to remain unchanged, while 37.1 percent expect an increase and 2.9 percent expect a decline.

The household demand index reaches 34.3 percent for the fourth quarter, compared with 11.4 percent in the third quarter and negative 2.9 percent in the second quarter.

Table 4  Household loan demand in percent

Banks expecting stronger household borrowing pointed to higher consumption, more attractive bank financing terms and increased housing investment.

The results leave banks and the BSP with one public-interest question: will steadier standards translate into affordable credit for qualified borrowers as demand strengthens?

Demand is strengthening before credit standards fully ease.