Majority of Philippine banks to maintain lending standards in Q1: survey

Banks maintained their credit standards for households, corporates in Q4.

Majority of banks in the Philippines maintained their lending standards in the fourth quarter of 2023, according to the latest survey by the local central bank.

Almost 9 in 10 (88%) of banks said that they maintained credit standards for businesses. 

For commercial real estate loans, 82.9% of respondents said that they maintained overall credit standards. 

Over the next quarter, both the modal and DI methods indicated respondents' expectations of generally unchanged credit standards for enterprises and for commercial real estate loans amidst banks’ sustained tolerance for risk and stable outlook for the overall economy, along with the steady profiles of borrowers.

Meanwhile, the majority of banks (70.6%) maintained their lending standards for household loans during the same quarter.

The 3 in 10 banks who did not maintain the same lending standards may have chosen to ease credit standards for consumer loans, according to Bangko Sentral ng Pilipinas, based on its diffusion index that pointed to a net easing of credit standards for this type of loan. This may be due to an improvement in the profitability of banks’ portfolios, higher risk tolerance, and a less uncertain economic outlook, the central bank said.

For Q1, a higher number of banks in the survey expects to maintain loan standards for households.