By Katherine K. Chan, Reporter
BANK LENDING within the Philippines may proceed to post double-digit growth this yr, S&P Global Rankings said, at the same time as the flood control fiasco continues to dampen business and consumer confidence.
S&P Global Rankings Director Nikita Anand said they still see banks’ loan growth ranging between 11% and 13% this yr, unchanged from their earlier projection.
“Our credit growth forecast for 2026 stays 11%-13%, primarily driven by consumer loans,” she told BusinessWorld in an e-mail.
Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that universal and industrial banks’ total outstanding loans rose by 10.3% to P13.988 trillion as of November from P12.676 trillion in the identical period in 2024. It was the identical growth rate seen at end-October.
Ms. Anand also noted that consumer loans could see faster growth than corporate loans this yr.
“It is because of (the) underserved nature of (the) Philippine market where consumer loans are growing fast from a smaller base,” she said. “Also, some corporates could hold off on capital expenditure plans amid tough operating conditions and rapidly evolving external environment.”
Based on BSP data, consumer loans climbed by 22.9% yr on yr to P1.892 trillion as of November from P1.54 trillion previously. Month on month, it eased from the 23.1% growth in October.
Meanwhile, big banks’ loans to businesses reached P11.789 trillion within the 11-month period, growing by 9% from P10.815 trillion within the previous yr.
Domestic bank lending will likely gain some boost from further monetary policy easing this yr, S&P also said.
Currently, the benchmark rate of interest stands at an over three-year low of 4.5%.
For the reason that Monetary Board began its easing cycle in August 2024, it has to this point lowered key borrowing costs by a cumulative 200 basis points (bps).
In a separate commentary, United Overseas Bank Ltd. (UOB) Group Global Economics & Markets Research said the Monetary Board could stand pat at its first policy meeting this yr, before easing anew within the second quarter once it has more data to contemplate.
“While we don’t rule out the opportunity of one other 25-bp policy rate cut at this meeting, we proceed to imagine that the BSP can afford to stay patient,” UOB Senior Economist Julia Goh and economist Loke Siew Ting said on Feb. 5. “Additional incoming data — particularly inflation data for February to April and the (first-quarter) GDP (gross domestic product) release in early May — and greater clarity on FOMC (Federal Open Market Committee) leadership changes might be crucial for any policy adjustments in (the second quarter).”
The UOB economists expect the central bank to deliver a final 25-bp cut within the second quarter to bring the important thing rate of interest to a terminal of 4.25%.
After headline inflation returned to the BSP’s goal range for the primary time in a couple of yr at 2% in January, the Monetary Board said they see the present easing cycle nearing its end.
Nevertheless, BSP Governor Eli M. Remolona, Jr. has said they might deliver a sixth straight cut in the event that they determine demand-side issues from the weaker-than-expected fourth-quarter economic growth.
This got here after the country’s GDP slumped to a post-pandemic low of three% within the last quarter of 2025 as a consequence of the lingering effects of the flood control corruption scandal. This brought the full-year GDP growth to 4.4%, the worst in five years.
Still, the central bank chief noted that inflation stays their top deciding think about their monetary policy path.
The Monetary Board can have its first policy review for 2026 on Feb. 19.