On 22 October 2026 the Bangko Sentral ng Pilipinas raised its policy rate by 50 basis points to 5.50%. It was the fourth straight hike this year. The BSP pointed to September inflation of 7.2% and said it stands ready to act again; its next meeting is on 17 December. For anyone who lends to businesses or accredits them as suppliers, the question is practical: has the financial position of your counterparties changed since you last looked?
Key takeaways
- The BSP raised its key rate to 5.50% on 22 October 2026 and signaled that further tightening is possible.
- Banks' gross bad-loan ratio was 3.35% in August 2026, but bad loans reached P596.3 billion and past-due loans rose to 4.33% of the portfolio.
- A counterparty's audited statements show its leverage, liquidity and cash flow at the last year-end. A review that is repeated and dated shows how far a higher-rate year may have moved them.
- A standardized assessment applied the same way to every borrower and vendor makes those reviews comparable.
What did the BSP decide, and why?
The Monetary Board raised the target reverse repurchase rate to 5.50%. The BSP cited its inflation outlook, with oil prices, transport fares and possible El Nino effects on food prices as drivers. The September inflation reading was 7.2%. Growth is weak: GDP growth was 2.3% in April to June.
What do bank figures show before this hike?
BSP data for August show the gross bad-loan ratio steady at 3.35%, while the peso value of bad loans rose to P596.3 billion from P585.7 billion in July. Past-due loans rose to 4.33% of total loans. Lending grew faster than bad loans, which kept the ratio flat. These figures predate the 22 October hike.
Why does it matter for the file on a borrower or vendor?
Higher interest rates raise the cost of debt for companies that borrow at floating rates. A company with high leverage or thin cash flow has less room. The audited statements on file show where each counterparty stood at its last year-end. They do not show where it stands after a year of rate increases. That gap is the reason to review again.
How should banks and procurement teams respond?
- List the counterparties with the most debt exposure. Start with borrowers and critical vendors whose audited statements show high leverage or low cash coverage.
- Re-read the latest audited statements against a consistent set of measures. Liquidity, leverage, profitability and cash flow, calculated the same way for every name.
- Date the assessment. The statement has a period-end date. Your review has its own date. Record both.
- Set the next review by exposure, not by calendar. Critical names get a shorter interval.
- Keep the reasoning on file. An approval is a status. The basis for it is the record.
Where does CreditBPO fit?
CreditBPO's Standalone Rating Report analyzes a company's audited financial statements and returns a composite rating, a probability of default score, strengths and concerns, and cash flow analysis, in 24 hours. Banks and enterprises use it to apply one method to every borrower or vendor. To see how that would work on your counterparty list, book a short discovery call.
Sources
BSP rate decision, Daily Tribune, 22 October 2026. Bank bad-loan data for August 2026, BusinessWorld, 4 October 2026, and Philstar, 5 October 2026.
This article reflects publicly reported information as of the date above and is not investment or legal advice.