Consumer loans to slow amid poor economic prospects

Consumer loan growth is expected to lose some momentum next year as softer economic activity, global uncertainties and shifting borrower sentiment weigh on demand, Bank of the Philippine Islands executives said.

BPI head of consumer banking Maria Cristina Go said weaker consumer confidence could temper loan expansion in 2026 even as interest rates continue to ease.

“We will be cautiously optimistic,” she said in an interview on the sidelines of BPI’s Kaya Care launch. “It will grow. It will continue to grow, at least we are optimistic about the growth, but not at the same rate as what we’ve seen this year.”

Go said BPI expects consumer and other non-institutional loans to expand by 10 to 15 percent next year, roughly half of this year’s pace, as households reassess big-ticket purchases amid a volatile global backdrop.

The more cautious outlook follows the country’s weaker-than-expected gross domestic product (GDP) print, which Go said “caught [them] by surprise.”

She added that borrowers are increasingly attentive to how global developments such as trade tensions, tariffs, foreign exchange swings and supply chain pressures affect affordability.

Despite expectations of moderation next year, BPI’s consumer portfolio continues to outperform this year.

Go said total non-institutional loans covering consumer and small business loans are growing by 28 percent year-on-year, supported by strong lending activity across home, auto, motorcycle, credit card, personal and small business segments.

“We’ve been able to shift our loan book portfolio. Now, 30 percent of total BPI loans is accounted for by consumer or non-institutional loans,” she said, adding that growth remained robust due to the bank’s “very deliberate and focused strategy on accessing and mining our consumer base.”

The strong growth trajectory is seen to hold in the fourth quarter, which typically accounts for 20 to 30 percent of annual credit card spending.

Lending for small and medium-sized enterprises has also exceeded targets. BPI initially projected about P35 billion in SME loan growth this year but has already reached around P50 to P55 billion.

“The demand is much stronger,” Go said, noting that MSME loans now stand at over P50 billion of the bank’s P750 billion non-institutional portfolio.

BPI attributes its outperformance to data-driven programs and hyper-targeted lending models. “We are very data-driven,” Go said. “These are programs that are hyper-targeted to certain segments of the market that allow us to determine their propensity to get a loan.”