Manila: Most banks have generally maintained their credit standards for businesses in the first quarter of 2025, as indicated by the results of the Q1 2025 Senior Bank Loan Officers’ Survey released by the Bangko Sentral ng Pilipinas (BSP) on Friday.
According to Philippines News Agency, the survey utilized a modal approach, analyzing the results based on the option with the highest number of responses. Approximately 81.8 percent of respondent banks kept their credit standards steady, a slight decrease from the 83.3 percent recorded in the previous quarter.
The BSP reported, “Banks tightened their loan standards for enterprises due to the deterioration in borrowers’ profile and profitability of banks’ portfolio.” Looking ahead, 85.5 percent of the respondents anticipate that lending standards for enterprises will remain generally unchanged in the next quarter.
However, the scenario differs for loans to households, with the credit standard index dropping to 86.8 percent from 89.5 percent in the last quarter of 2024. The BSP noted, “Banks tightened their loan standards for households due to the deterioration of borrowers’ profile, reduced tolerance for risk, and deterioration in the profitability of banks’ portfolio.”
Regarding loan demand, around 67.3 percent of the respondent banks reported unchanged overall demand from enterprises, though this is a decrease from the 74.1 percent in the previous quarter. For the second quarter, banks anticipate steady overall loan demand, driven by factors such as increased customer inventory financing needs, clients’ optimistic economic outlook, and a rise in borrowers’ short-term financing needs.
Consumer loan demand also showed a consistent trend, with 71.8 percent in the first quarter compared to 73.7 percent in the prior three months. This is primarily attributed to banks’ more attractive financing terms and clients’ increased consumption. A steady household loan demand is expected for the second quarter, with 66.7 percent of respondents indicating such, citing clients’ rising consumption and banks’ more favorable credit terms.
