MOST banks still have generally steady credit standards for businesses in the first quarter of 2025, results of the Q1 2025 Senior Bank Loan Officers’ Survey released by the Bangko Sentral ng Pilipinas (BSP) on April 25 showed.
Based on the modal approach, which analyzed the results by looking at the option with the highest number of responses, about 81.8 percent of respondent banks retained their credit standards, which, however, is lower than the 83.3 percent of the respondents in the previous quarter’s survey
“Banks tightened their loan standards for enterprises due to the deterioration in borrowers’ profile and profitability of bank’s portfolio,” the BSP said.
For the next quarter, 85.5 percent of the respondents expect lending standards for enterprises to still be generally unchanged.
It is a different story, however, for the credit standard for loans to households, with the index down to 86.8 percent from 89.5 percent in the last quarter of 2024.
“Banks tightened their loan standards for households due to the deterioration of borrowers’ profile, reduced tolerance for risk, and deterioration in the profitability of bank’s portfolio,” the BSP said.
In terms of loan demand, most of the respondent banks, about 67.3 percent, have unchanged overall demand to enterprises, although the share of those that reported steady loan demand is lower than the 74.1 percent in the previous quarter.
For the second quarter of this year, banks expect steady overall loan demand “driven by higher customer inventory financing needs, clients’ more optimistic economic outlook, and an increase in borrowers’ short-term financing needs.”
The same situation is expected for consumer loan demand, with the figures at 71.8 percent in the first quarter this year from the previous three months’ 73.7 percent, traced primarily “to banks’ more attractive financing terms and clients’ higher consumption.”
A steady household loan demand is expected for the second quarter, with 66.7 percent of the respondents indicating such “owing to clients’ rising consumption and banks’ more favorable credit terms.” (PNA)
