Philippine banks face prospect of slower lending growth
UnionBank continues to forecast double-digit loan growth for 2026 and has no immediate plans to cut its consumer lending exposure.
Weak borrowing appetite and pressure from elevated interest rates could slow the expansion of Philippine bank lending, according to Bankers Association of the Philippines president Ana Aboitiz Delgado. She said a softer economy was making lenders and borrowers more cautious.
Delgado linked the expected moderation to both tighter lending conditions and reduced demand among businesses and households. Signs of borrower stress were emerging, she said, but the picture differed across banks and customer segments. Some corporate borrowers continued to show resilience.
The latest Bangko Sentral ng Pilipinas figures nevertheless showed lending expanding by 11.4 per cent in September, compared with 11 per cent in August. Outstanding loans reached ₱15.27 trillion. The central bank lifted its benchmark rate by 50 basis points in October to 5.50 per cent in an effort to contain persistent inflation.
At Union Bank of the Philippines, where Delgado serves as president and CEO, the forecast remains for double-digit loan growth in 2026. She did not give a specific target and said improving portfolio quality meant the bank had no immediate plans to reduce its consumer lending exposure.
Consumer loans made up 62 per cent of UnionBank’s loan portfolio. Its gross nonperforming loan ratio improved to 6.56 per cent, while coverage for loan losses reached 75.77 per cent. Delgado said the banking industry was ready to support faster lending when economic conditions improved.
