Loan growth to inch up amid BSP rate cuts

S&P Global Ratings expects Philippine banks’ lending growth to slowly increase in the next two years amid the monetary easing cycle of the Bangko Sentral ng Pilipinas (BSP).

- KEISHA TA-ASAN

“We think that the loan growth will start to pick up, but at a very slow rate,” Ivan Tan, director and Southeast Asia lead analyst at S&P Global Ratings said in a webinar yesterday.

He said that the 25-basispoint interest rate cut last week would not immediately impact loan growth, as the key policy rate is “still quite high” at 6.25 percent.

“We think that most of the loan growth pickup will only come in 2025. That’s when we forecast the policy rate will be cut to five percent by next year,” he said.

Tan said loan growth in the Philippines was mostly hovering at seven percent in 2023, significantly lower than the double-digit 10 to 12 percent growth before the pandemic.