Results of the Q2 2024 Senior Bank Loan Officers’ Survey (SLOS) OF THE Bangko Sentral ng Pilipinas showed that most respondent banks kept their credit standards unchanged for credit to businesses and consumers.
Results revealed that most survey participants retained credit standards for businesses based on the modal approach. The share of banks that reported unchanged credit standards in the second quarter was slightly higher than in the previous quarter.
Meanwhile, the DI approach showed a sustained net tightening of credit standards from the previous quarter due to the deterioration of borrowers’ profiles and profitability of banks’ portfolios.
Over the next quarter, the modal approach showed participant banks’ expectations of generally unchanged lending standards for businesses.
However, DI results showed banks’ anticipation of a net tightening in credit standards given the deterioration in borrowers’ profiles and in the profitability and liquidity of banks’ portfolios.
Modal results showed that a higher proportion of banks have maintained their credit standards for household loans. The DI method also reflected unchanged credit standards, similar to the previous quarter, due to stable profiles of borrowers and banks’ unchanged tolerance for risk.
For the following quarter, the modal-based approach indicated a majority of respondent banks expecting unchanged household loan standards.
Most bank participants indicated unchanged overall demand for business loans. The share of banks that reported increased demand for business loans during the quarter was slightly higher than in Q1 2024.
On the other hand, the DI method reflected a higher net increase in credit demand from businesses in Q2 2024 relative to the previous quarter due to increased inventory and accounts receivable financing needs, as well as improvement in economic outlook.
In the next quarter, most of the surveyed banks expect broadly steady loan demand from firms. However, DI results showed that bank participants anticipate a net rise in credit demand from businesses in Q3 2024 given firms’ higher inventory and accounts receivable financing needs.
Modal results showed a lower proportion of banks indicating unchanged household loan demand in Q2 2024 compared to Q1 2024.
Meanwhile, the DI approach showed a higher net increase in household loan demand during the quarter compared to the previous quarter, driven by banks’ more attractive financing terms as well as higher household consumption and housing investment.
For the next quarter, modal results indicated that most respondent banks anticipate steady demand for loans to households. On one hand, DI results showed an expected net increase in household loan demand driven by rising household consumption and banks’ more attractive lending terms.
