Philippine banks signal credit squeeze as tightening bias grows in Q1

About 12.8% of banks expect to tighten credit standards for household loans.

Nearly 9 in 10 (87.7%) of Philippine banks expect to keep their overall credit standards unchanged in Q1 2026, higher than the 85% in Q4 2025, according to data from the Bangko Sentral ng Pilipinas (BSP).

Over 1 in 10 (10.5%) of banks expect to tighten lending standards, whilst 1.8% anticipate easing standards, according to the study, which surveyed senior loan officers from 58 universal and commercial banks, thrift banks, and rural banks.

For the banks changing their credit standard, more expect to tighten standards for household and business loans than ease them.

This indicates that any future change in credit standards is more likely to reflect tighter than looser credit standards, the central bank said in a report published on 30 January 2026.

About 12.8% of banks expect to tighten credit standards for household loans, versus 7.7% expecting looser lending norms.

For business loans, a net 8.8% of banks expect to tighten rather than ease business loans.