By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.
MANILA, Philippines – Underlying asset-quality risks continue to simmer in the Philippine banking sector, Fitch Ratings said, warning that the rapid expansion of unsecured consumer lending could leave banks more exposed as income growth slows and inflationary pressures from the Middle East conflict weigh on households.
In a note released on Thursday, Fitch cut its forecast for banking system loan growth to 9 percent in 2026 from 12 percent, citing heightened macroeconomic uncertainty, elevated long-term interest rates and weaker corporate appetite for capital spending. The ratings agency said banks were also likely to become more cautious in extending credit.
READ: PH banks’ loan quality at risk from oil shock
Fitch expects demand for unsecured consumer loans to soften while write-offs of impaired loans increase as higher inflation and a more challenging economic environment strain borrowers’ repayment capacity. Credit card receivables, in particular, pose “outsized credit risks” because they remain relatively unseasoned.
