showed that 69.4% of banks tightened lending standards for enterprises during the 2nd quarter of 2020.
Banks said this was due to the country’s less favorable economic outlook, deterioration in the profiles of borrowers, and banks’ reduced tolerance for risk, among other factors. Banks added that they would still be strict in the 3rd quarter, as the Philippines dives into recession. This was mainly due to the deterioration in clients’ business prospects amid the lockdown and the decline in customer inventory financing needs and working capital requirements, which was attributed in turn to the delay in investment plans in plants or equipment.
For commercial real estate loans, banks saw an unchanged demand from the 1st quarter. Over the 3rd quarter, a higher number of respondent banks anticipated a generally steady loan demand in real estate loans.