Most commercial banks maintained their credit standards for loans to businesses and consumers based on a Bangko Sentral ng Pilipinas (BSP) survey.

Results of the Q1 2025 Senior Bank Loan Officers’ Survey (SLOS) showed the diffusion index (DI) method indicated a net tightening of credit standards for business loans and households.

The first quarter survey results showed that most respondent banks (81.8 percent) retained their credit standards, a decrease from the previous quarter, where 83.3 percent of respondents indicated unchanged loan standards.

On one hand, the diffusion index approach reflected fewer respondents reporting tighter credit standards in the first quarter compared to the previous survey round.

Banks tightened their loan standards for enterprises due to the deterioration in borrowers’ profiles and the profitability of the banks’ portfolios.

Over the next quarter, 85.5 percent of participant banks anticipate generally unchanged lending standards for enterprises.

Likewise, the index results indicated expectations of unchanged loan standards for the quarter, given the steady economic outlook and unchanged risk tolerance and profile of borrowers.