Philippine bank lending to micro, small and medium enterprises (MSMEs) rose 7.13 percent to P536.51 billion as of end-September 2025 from P500.81 billion a year ago, reflecting a steady recovery in business activity.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that loans to micro and small enterprises (MSEs) grew to P225.17 billion, while loans to medium enterprises (MEs) expanded to P311.34 billion.
MEs received the largest share of the loans, as they are “generally more bankable” with strong financial statements, better collateral and clear expansion plans, according to an economist.
“This MSME lending growth reflects steady recovery in business activity in the retail, food, logistics, and service sectors, which tend to expand ahead of the holiday season,” said John Paolo Rivera, a senior research fellow at the Philippine Institute for Development Studies.
“Banks have also become more willing to lend as MSMEs show better cash flow and repayment performance compared to the pandemic years,” said Rivera.
Universal and commercial banks provided P158.57 billion to MSEs and P253.35 billion to MEs.
Thrift banks allocated P31.64 billion for MSEs and P37.23 billion for MEs. Rural and cooperative banks lent P34.31 billion to MSEs and P20.69 billion to MEs. Meanwhile, digital banks contributed P658 million to MSEs and P68 million to MEs.
The BSP said it continues to monitor banks’ MSME lending data as part of its supervisory oversight and policy development, despite the expiration of a mandate requiring banks to allocate at least 8 percent of their loan portfolios for MSMEs under the Magna Carta for MSMEs in June 2018.
