Steady bank credit standards seen in early 2026

Banks in the Philippines are generally expected to maintain their credit standards for both businesses and households in the first quarter (Q1) of 2026, according to the latest Senior Bank Loan Officers’ Survey released by the Bangko Sentral ng Pilipinas (BSP).

The BSP survey showed that 87.7 percent of respondent banks anticipate keeping credit standards for enterprise loans unchanged in Q1 2026, up from 86.0 percent in Q4 2025, indicating broad stability in lending policies for businesses.

Only 1.8 percent of banks expect to ease their lending standards for enterprises, while 10.5 percent foresee tighter standards, reflecting a cautious but largely steady stance toward corporate credit.

For household loans, 79.5 percent of banks said they expect to retain existing credit standards in Q1 2026, slightly lower than the 82.5 percent recorded in the previous quarter.

The remaining banks projected either tighter lending standards at 12.8 percent or looser standards at 7.7 percent, suggesting modest shifts in consumer credit conditions compared with late 2025.

Chart 1. Distribution of Banks’ Responses to Changes in Credit Standards

For Enterprises and Households (in percent)

Among banks that anticipate changes in credit standards, a net 8.8 percent expect tighter rather than looser standards for business loans, while a net 5.1 percent expect tighter standards for household loans in Q1 2026.

These figures indicate that any adjustment in lending practices is more likely to lean toward tightening, although the expected degree of net tightening is lower than in Q4 2025, when net tightening stood at 14.0 percent for business loans and 7.5 percent for household loans.

Chart 2. Changes in Overall Credit Standards – Diffusion Index Method

For Enterprises and Households (in percent)

DEMAND FOR BUSINESS LOANS

On the demand side, 70.2 percent of banks expect business loan demand to remain steady in Q1 2026, down from 80.7 percent in the previous quarter, pointing to more varied expectations among lenders.

Only 1.8 percent of banks foresee a decline in business loan demand, compared with 5.3 percent in Q4 2025, while 28.1 percent expect demand to increase, double the 14.0 percent recorded in the prior quarter.

Chart 3: Changes in Loan Demand from Enterprises

(in percent)

Demand for Household Loans

Household loan demand is also expected to show more dynamism, with 61.5 percent of banks projecting steady demand in Q1 2026, a lower share than in Q4 2025.

About 7.7 percent of respondents anticipate a decline in household loan demand, while 30.8 percent expect demand to increase, both figures reflecting stronger optimism compared with the previous quarter.

 Chart 4: Changes in Loan Demand from Households

(in percent)

The BSP noted that credit standards refer to banks’ internal rules on lending, including interest rates, loan size, collateral requirements, loan covenants, and repayment terms, which collectively shape access to credit for firms and consumers.

The Q1 2026 survey gathered responses from senior loan officers of 58 universal and commercial banks, thrift banks, and rural banks, providing a broad view of lending conditions across the Philippine banking system.

The Senior Bank Loan Officers’ Survey tracks quarter-on-quarter changes in banks’ perceptions of credit supply and demand, offering insights into future lending trends that can influence economic activity and financial conditions nationwide.