Market & Mainstreet
Credit Growth Seen Slowing as Diesel and Power Costs Ease for Now
The Daily Scan – October 13, 2026 (Tue)
Credit is still growing, but forecasters expect it to cool. Bank loans grew 11.9% in August, and BMI now sees growth easing to 9% by end-2027 as rate hikes feed through and banks tighten standards.
Some cost relief arrived this week. Diesel is down P3.01 a liter, though gasoline is up P1.56. Meralco has been ordered to refund P2.64 billion over about six months. The Philippines also posted its highest sales ever at the China-ASEAN Expo.
Abroad, India’s inflation rose to 5.54% on food prices and a weak monsoon, the IMF’s global outlook is due today in Bangkok, and an AI data center IPO was scrapped for lack of demand. For owners: use the cost relief to build cash and line up credit before banks get stricter.
| Bank loans, August | Diesel this week | Meralco refund |
| +11.9%, BMI sees 9% by end-2027 | -P3.01, per liter, gasoline +P1.56 | P0.1733, per kWh, residential |
SECTION 1 · Philippines
● Bank lending beat forecasts in 2026, but credit growth is seen slowing through 2027
WHAT HAPPENED
BMI, a Fitch Group unit, raised its 2026 forecast for Philippine credit growth to 10% from 8.5% after outstanding bank loans grew 11.9% in August. It still expects loan growth to slow toward year end and ease to 9.0% by end-2027, as tighter financial conditions, high inflation and weak activity dampen demand. It says consumer lending is already moderating, and that banks may tighten lending standards as borrowing costs rise. BMI warns that rapid loan growth has masked rising bad debt: the gross nonperforming loan ratio is around 3.4%, against a 2.6% average in the decade before the pandemic. The banking system’s capital adequacy ratio was 15.2% in the second quarter, above the 10% minimum, though it has declined in recent quarters.
UNCERTAIN
These are one research firm’s forecasts. BMI notes that recovering construction lending could partly offset the slowdown, and that lending has so far done better than it expected. The Philippine Star reports that BMI also expects another 25 basis point BSP hike in October, which is a forecast, not a decision.
WHY IT MATTERS
Our read: if banks tighten lending standards, SMEs could face tougher approvals and higher rates even while total credit still grows.
RISK / OPPORTUNITY
Risk: a credit line you rely on is cut or repriced. Opportunity: businesses with clean books and steady cash flow may stand out to banks that become more selective. Both are our interpretation.
NEXT MOVE
Ask your bank about renewal terms for any loan or credit line that falls due in the next six months.
PhilStar → , The Manila Times →
● Diesel falls P3.01 a liter while gasoline and kerosene rise again
WHAT HAPPENED
The DOE announced pump price adjustments for Oct 13 to Oct 19: diesel down P3.01 a liter, gasoline up P1.56 and kerosene up P1.77. It is the third straight weekly diesel cut and the second straight weekly rise for gasoline and kerosene. The DOE credits the diesel cut to a G7 plan to release 100 million barrels of petroleum supplies, with diesel prioritized, and a US-Russia agreement on diesel supply. It says gasoline and kerosene are rising on tight supply and China’s temporary suspension of refined fuel exports. BusinessWorld reports Metro Manila pump prices after the change at P107.46 for gasoline, P100.16 for diesel plus and P146.34 for kerosene per liter.
UNCERTAIN
A DOE official told reporters that diesel pressure should ease in the coming weeks once the supply releases are carried out. That depends on those deals being delivered, and gasoline and kerosene do not have the same support. Weekly adjustments can reverse.
WHY IT MATTERS
Our read: trucks, buses and boats run mostly on diesel, so transport, delivery and food SMEs feel the cut first. Gasoline users, such as small vehicles and motorbikes, face another rise.
RISK / OPPORTUNITY
Risk: diesel relief reverses if the supply deals stall or the Gulf conflict widens. Opportunity: a short window to renegotiate delivery rates or fuel surcharges while diesel is lower. Both are our interpretation.
NEXT MOVE
Check whether the fuel surcharges in your quotes still match this week’s diesel price.
BusinessWorld → , Rappler → , PhilStar →
● ERC orders Meralco to refund P2.64B over six months
WHAT HAPPENED
The ERC ordered Meralco to refund about P2.64 billion to customers over six months, covering January to June 2026. The average refund rate is P0.1020 per kWh. Residential and General Service A customers get P0.1733 per kWh, and flat streetlights P0.1764. The ERC found that Meralco’s actual weighted average tariff was P1.5537 per kWh, above the approved distribution rate of P1.3522 for that period. Meralco had proposed returning the money over 12 months at P0.0487 per kWh. The Philippine Star reports the refund will appear as a separate bill line and works out to about P34.66 for a household using 200 kWh.
UNCERTAIN
The refund is provisional. Hearings on the final evaluation run Oct 16 to 23, and the amount can be adjusted afterward. The Inquirer notes the new distribution rate’s start date has not been announced.
WHY IT MATTERS
Our read: this follows the ERC’s approval of a higher average distribution rate of P1.48 per kWh from P1.35. For residential and General Service A customers, the P0.1733 refund is larger than the average 13 centavo increase, so the refund may cover the rise for about six months. Other customer classes get smaller refunds, so check your own class.
RISK / OPPORTUNITY
Risk: when the six months end, the higher distribution rate remains. Opportunity: a few months of lower net power costs may give you room to invest in efficiency before the full increase lands. Both are our interpretation.
NEXT MOVE
Find the refund line on your next bill and note which month it ends, so you can plan for the full increase.
● Philippines posts record sales at the China-ASEAN Expo despite sea tensions
WHAT HAPPENED
The Philippines generated its highest sales ever at the China-ASEAN Expo in Nanning, beating the previous record of $49 million set in 2024, The Philippine Star reports. Last year’s sales were $18 million. As Country of Honor, the Philippines sent its largest delegation of 313 people, including 73 export enterprises in agrifood, lifestyle, home and fashion, personal care, tourism, banking and pharmaceuticals. Trade Secretary Cristina Roque said it is business as usual for trade and investment despite maritime tensions between Manila and Beijing.
UNCERTAIN
The report excerpt does not give this year’s total. Expo sales can include orders and commitments that are not yet delivered or paid. Tensions with China could affect trade later.
WHY IT MATTERS
Our read: China is a large market for Philippine food, lifestyle and personal care products, and a pooled national delegation may make it easier for small exporters to show up.
RISK / OPPORTUNITY
Risk: political tension could disrupt trade at short notice. Opportunity: small exporters in food and lifestyle can ask the DTI about joining future delegations. Both are our interpretation.
NEXT MOVE
If you export or plan to, ask your nearest DTI office about the next trade fair delegation and its requirements.
SECTION 2 · Worth Knowing
● India’s inflation jumps to 5.54% on food prices and a weak monsoon
WHAT HAPPENED
India’s retail inflation rose to 5.54% in September from 4.82% in August, above the 5.4% forecast in a Reuters poll. Food inflation climbed to 7.74% from 5.97%, led by onion, ginger and garlic, and transport inflation rose to 5.01%. India had its lowest June to September rainfall in over a decade, and CNBC notes the added risk from a Super El Niño. The Reserve Bank of India recently raised its repo rate to 5.5%.
UNCERTAIN
Part of the rise reflects base effects from lower prices a year earlier. Analysts quoted by Reuters expect the RBI to keep the door open for another hike in December, which is a forecast.
WHY IT MATTERS
Our read: the Philippines faces the same mix of oil and weather risk. Nomura lists a potentially strong El Niño as an upside risk to its Philippine inflation forecasts, according to The Philippine Star.
RISK / OPPORTUNITY
Risk: food prices could keep rising across Asia into 2027 if El Niño persists, as one analyst quoted by Reuters suggests. Opportunity: firms that secure staple supplies early or spread their supplier base may protect margins. Both are our interpretation.
NEXT MOVE
If food is a big cost for you, ask suppliers about forward pricing or alternative sources for key staples.
CNBC → , Investing.com →, PhilStar →
● IMF and World Bank meet in Bangkok as the IMF’s global outlook is due today
WHAT HAPPENED
The IMF and World Bank annual meetings run Oct 12 to 18 in Bangkok. The IMF’s World Economic Outlook is scheduled for release today, from 9 am Bangkok time, alongside its Global Financial Stability Report, according to The Nation Thailand. Al Jazeera reports that the IMF has signaled little change to its forecast of about 3% global growth for 2026 and may edge its 2027 forecast slightly higher. Some countries, including Ukraine and Gulf states hit by Iranian strikes, could see downgrades. The IMF says public debt is at its highest since World War II and will exceed 100% of GDP before 2030.
UNCERTAIN
The new forecasts were not out when this edition was compiled. The signals above come from IMF comments ahead of the release, and the final figures could differ. Check the IMF’s own release for Philippine numbers.
WHY IT MATTERS
Our read: the IMF’s view on global growth and debt shapes borrowing costs and capital flows into emerging markets such as the Philippines.
RISK / OPPORTUNITY
Risk: a downgrade or a warning on debt can push investors away from emerging markets. Opportunity: a steady outlook could support demand for Asian exports. Both are our interpretation.
NEXT MOVE
Read the IMF’s Philippine growth and inflation figures once they are out, and compare them with the assumptions in your own plan.
The Nation Thailand → , Al Jazeera →
● AI data center funding hits a snag as Firmus scraps its $5B IPO
WHAT HAPPENED
Firmus, an AI data center operator backed by Nvidia, cancelled its planned $5 billion IPO in Australia and said it will look for private funding. Shares of Maas Group, which holds a 3.2% stake in Firmus, fell 11.2% in intraday trading to a six-month low, Investing.com reports. The cancellation raises uncertainty over Maas’s A$410 million investment and about A$1.1 billion in orders from Firmus. Reuters reports the deal met lukewarm demand and that investors worried about Firmus’s debt.
UNCERTAIN
An analyst quoted by Reuters called it a reality check for the AI investment boom, not the end of the AI trade. Whether other AI infrastructure deals face the same pushback is not settled.
WHY IT MATTERS
Our read: AI infrastructure is expensive to finance, and public investors are becoming more selective. That matters for data center plans in the Philippines that depend on equity and debt markets.
RISK / OPPORTUNITY
Risk: tighter funding for AI infrastructure could slow projects and the supply orders attached to them. Opportunity: firms with strong balance sheets may partner or buy on better terms. Both are our interpretation.
NEXT MOVE
If you supply a project that depends on outside funding, ask how it is financed and how you will be paid.
Yahoo Finance →, The Standard →
SECTION 3 · THE OPPORTUNITY BEHIND THE NEWS
Use the cost relief to line up credit before it tightens
Two stories point in different directions. On costs, diesel falls P3.01 a liter this week, and Meralco has been ordered to refund P2.64 billion over about six months, at P0.1733 per kWh for residential and General Service A customers. On credit, BMI expects banks to tighten lending standards as borrowing costs rise, even though loans still grew 11.9% in August.
For a small business, that may be a window. Lower diesel and a power refund can give you a few months of breathing room. You could use it to build cash, pay down the loan that costs you most, or ask your bank about renewing credit lines before approvals get stricter. This is an idea to consider, not a recommendation for your specific case.
The caution is that the relief is temporary. The diesel cut can reverse, the refund is provisional until the ERC’s final review, and the higher distribution rate stays. Do not plan around the savings continuing. This section is our interpretation of news items, not a forecast.
SECTION 4 · FOUNDER’S LESSON
Show up where the buyers are
Imagine you make dried mangoes or personal care products and you want to sell abroad. Finding foreign buyers on your own is slow, and most of them have never heard of you.
The Philippines sent its largest delegation yet to the China-ASEAN Expo, 313 people including 73 export enterprises, and posted its highest sales ever there, above the $49 million record set in 2024. The Trade Secretary said it is business as usual for trade despite sea tensions.
The lesson is about where you spend your effort. A pooled delegation puts many small sellers in front of buyers at the same time. If you wait for buyers to find you, you may wait a long time. Ask your DTI office about the next fair, prepare samples and prices, and set a small goal, such as five serious buyer conversations. Expo sales are not the same as paid and delivered orders, so follow up and check each buyer. This is our reading of the news, not a promise of results.
SECTION 5 · ONE REAL SIGNAL
Credit is the pipe that rate hikes flow through
Bank lending still looks strong. Outstanding loans grew 11.9% in August, and BMI raised its 2026 credit growth forecast to 10% from 8.5%, The Manila Times reports. That strength has helped hide a weaker spot.
BMI expects the pace to cool. It sees credit growth easing to 9% by end-2027 as BSP hikes feed through, consumer lending moderates and banks tighten standards. It warns that fast loan growth has masked rising bad debt, with the gross nonperforming loan ratio near 3.4% against 2.6% in the decade before the pandemic. Banks have a cushion: the capital adequacy ratio was 15.2% in the second quarter against a 10% minimum, though BMI notes it has been falling.
The rate path matters here. The Philippine Star reports that BMI expects another 25 basis point BSP hike in October. BusinessMirror reports that Nomura forecasts the same, and says the Philippines has the most widespread inflation pressure among the Asian economies it tracks, with core inflation at 4.7%.
How to read this: the loan growth and bad loan figures are BSP data reported by the press. The slowdown and the rate hike are forecasts from research firms. Use them to plan for stricter lending, not to assume it.
- IMF outlook, today. Whether the IMF keeps global growth near 3% and what it says about debt and interest rates.
- US inflation report, Wednesday. The September consumer price report is due Wednesday, Oct 14, and a hot number could lift yields and the dollar.
- Oct 16 to 23 ERC hearings. The Meralco refund amount can change after the final review.
- Oct 22 BSP decision. Whether it hikes by 25 basis points, as BMI and Nomura expect.
Summarized in our own words with links to every source. We don’t reproduce full articles or bypass paywalls. Interpretation is labeled as such and kept separate from reported fact.
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