A Bangko Sentral ng Pilipinas-sponsored survey showed that most banks aim to keep their lending standards for businesses and households in the first quarter of the year as they expect a stable economy ahead.

Its Senior Bank Loan Officers’ Survey for the fourth quarter of 2023 showed 81.8 percent of banks would maintain their lending standards for households in the next two months due to “profitability of their portfolios, higher risk tolerance, and more favorable economic outlook.”

More banks shared this opinion compared to 70.6 percent of the respondents who said they kept their lending standards steady in the fourth quarter of the previous year.

The third-quarter result was fewer, with 68.8 percent of the respondents favoring steady standards.

For household loan demand, 50 percent of banks said they expect more loan applications due to the strong appetite for consumption, partly driven by “more attractive financing terms” of banks.

Steady demand is seen by 47.1 percent, while only 2.9 percent believe demand will decline.

This outlook came after 28.1 percent of banks said household loan demand was steady in the fourth quarter of last year.

The BSP said lenders’ friendly terms were designed to accommodate the financial capabilities of many consumers who believe prices of goods and services might increase. Based on its recent consumer expectations survey, job opportunities might become elusive this year.

The banks said that Housing loan standards will likely be unchanged due to these risks.

Enterprises loans

Most banks, or 84 percent, said they would keep their lending standards for firms due to their “sustained tolerance for risk and stable outlook for the overall economy as well as for industries and firms, along with the steady profiles of borrowers.”

However, fewer than 88 percent of the respondents said they imposed steady lending standards for firms in the fourth quarter of 2023.

The third-quarter result was even fewer, with 80.9 percent of the respondents favoring unchanged standards.

Due to a stable economic outlook, the banks said real estate loan standards for corporate borrowers will likely be kept. They expressed the same steady outlook for real estate loan demand from enterprises.

Regarding loan demand from enterprises, only 38 percent of banks expect the demand to grow, compared to 58 percent that see a steady level.

However, these figures are still more upbeat as only 24 percent of banks said demand rose in the fourth quarter last year, and 66 percent experienced an unchanged demand level.

The outlook is driven by “more positive economic prospects along with higher customer inventory financing and accounts receivable needs,” the banks said.