Bank Loans 2026 — Banks Expect Slower Lending as High Interest Rates and a Weak Economy Weigh on Borrowers
BANK LOANS 2026 – Filipinos and businesses planning to borrow from banks may find lenders more careful in the coming months, as the Bankers Association of the Philippines (BAP) expects loan growth to slow amid higher interest rates and a softer economy.
“I think loan growth will be probably a little bit slower as you can expect, not just because the banks are tightening, but also, clients are waiting and seeing,” BAP President Ana Maria Aboitiz-Delgado, who is also the president and CEO of Union Bank of the Philippines (UnionBank), told reporters, as quoted by BusinessWorld.
She explained that the expected slowdown is partly by choice and partly due to weaker demand. “Some of it is deliberate and some of it is just that there’s not a lot of demand right now,” Aboitiz-Delgado said, according to The Philippine Star.
Bank Lending Still Grew in September
The BAP outlook comes even as the latest data from the Bangko Sentral ng Pilipinas (BSP) showed faster credit growth. Based on the reports:
- 11.4% – growth of outstanding loans of universal and commercial banks as of September 2026, up from 11% in August
- ₱15.265 trillion – total outstanding loans as of September, from ₱13.704 trillion a year earlier
- Fastest in four months – the September growth was the quickest since the 12.1% recorded in May, BusinessWorld noted
Why Borrowing Could Slow Down
The BSP has raised its benchmark interest rate to 5.50% after a bigger-than-expected 50-basis-point hike in October to fight persistent inflation. Higher policy rates usually make loans more expensive, which can discourage people and companies from borrowing.
Aboitiz-Delgado admitted that some parts of the loan market are already showing signs of stress because of the central bank’s rate hikes since April, though conditions differ from one bank and segment to another.
“So, I think given that the economy is softer, you can expect a little bit of stress in certain parts of the market. But then, other parts are also strengthening. I think some of the corporates are still showing resilience,” she said.
UnionBank Not Cutting Back on Consumer Loans
For UnionBank, the BAP head said the lender still expects double-digit loan growth this year, although she did not give a specific target. The bank also has no immediate plan to reduce its consumer lending, which makes up 62% of its total loan book, nearly three times the industry average, Philstar reported.
- Consumer loans are “still growing quite well,” according to Aboitiz-Delgado
- Loan-loss (NPL) coverage rose to 75.77%
- Net income jumped 53% to ₱9.9 billion in the first nine months of 2026
“There’s no reason for us to cut back as a whole. If we’re seeing deterioration, then maybe that would be a consideration. But we’re seeing improving loan volume, but cautious,” she said, as quoted by BusinessWorld.
She added that a weaker peso could also raise the local buying power of dollar remittances, and that the banking industry is ready to lend more once the economy improves. “Hopefully, as the economy picks up, we can get back again. I think that’s what we’re preparing for,” she said.
What This Means for Borrowers
With interest rates still high and banks watching their asset quality, those planning to apply for a personal, auto or home loan may want to compare offers from different lenders, check the monthly amortization carefully, and make sure the payments fit their budget before signing up.
Have you read about the BSP interest rate outlook and the latest Philippine GDP report for Q3 2026?
