Sticky Philippine loan rates blunt impact of central bank cuts

The Philippine central bank has slashed its key policy rate by almost two percentage points to 4.75% since last year, but the price of a home loan from the nation’s top banks has barely budged.

BDO Unibank Inc. charges a 6% fixed rate on new housing loans for the first year, with the debt then subject to repricing, or else 6.5% fixed for five years. That’s roughly the same as the minimum offered in 2024, and rates at Bank of the Philippine Islands and Metropolitan Bank & Trust Co. show a similar trend.

Examples of home loan rates November 2025

Across Asia, as policymakers have reduced benchmark rates to support economic growth in the face of US tariffs, there’s evidence that banks aren’t fully passing on the cuts to consumers, according to Australia and New Zealand Banking Group. In the Philippines’ case, the stickiness of borrowing costs may prolong a slump that’s left its economy trailing Indonesia and China in growth.

Philippine commercial banks’ average lending rate, after dipping earlier in the year, hit 8.132% in August, up from 8.097% at the end of last year, Bangko Sentral ng Pilipinas data show. That’s as the benchmark has been cut 175 basis points since August last year.

For Philippine lenders, there’s little incentive to cut interest rates when a scandal over government graft has rocked confidence, threatening more bad loans. Demand is also weak: growth in household consumption, which accounts for more than 70% of the nation’s output, hit a four-year low in the three months through September as consumers held off spending.

“There’s this corruption scandal. Liken it to a toothache – the rest of the body feels it because everything is connected,” said Jonathan Ravelas, managing director at eManagement for Business and Marketing Services, a Manila-based consultancy. “Banks are cautious because of the economic outlook. It challenges jobs.”

“Banks are exercising prudent credit underwriting, particularly in consumer segments, to mitigate non-performing loan risks,” the Bangko Sentral ng Pilipinas said in response to questions.

It noted that a survey of bank loan officers showed most expect tighter lending standards for households in the current quarter, “citing a deterioration in portfolio profitability, a less favorable economic outlook, reduced risk tolerance, and weakening borrower profile.”

To be sure, total loans are still gaining, rising 10.5% in September from a year earlier, down from 12.2% at end-2024. And banks have eased up in some ways, with mortgage incentives including lower downpayments; waivers of application, registration and appraisal fees; or free insurance for the first year.

“We’re cautiously optimistic about where lending rates are headed. In the near term, we expect them to hold steady or dip slightly,” said Maria Cristina Go, head of consumer banking at BPI, one of the biggest in the country. “This will depend not only on the policy rates that will impact funding costs but will also consider inflation trends and asset quality.”

BDO Unibank said it expects lending rates for this year and the next two years to be “generally in the same range given current economic conditions.” And BSP data shows the rate at which banks lend to each other is declining.

The BSP says data shows lending rates “generally moved in line” with policy rate cuts, though the range and degree differed across loan types. It added that not all lenders engage in rate competition.

“I’m actually in the camp transmission is getting better,” said Euben Paracuelles, chief ASEAN economist at Nomura Holdings Inc. “It’s certainly not the lowest in the region and I would say compared to past cutting cycles, policy transmission of BSP’s latest rate cuts is improving.”

In the meantime, banks and consumers are cautious amid worsening political uncertainty. In July, President Ferdinand Marcos Jr. unveiled a major campaign against corruption, especially in flood control projects. Massive protests erupted in anger at the scale of the graft, and the government slowed public works spending to allow more scrutiny, with stocks sliding to a three-year low.

Sentiment had already been hit by a year of fierce feuding between Marcos and Vice President Sara Duterte.

The Philippines isn’t alone in seeing banks refrain from rate cuts. Bank Indonesia’s governor last month criticized banks for only cutting lending rates by 15 basis points, even as the benchmark has been reduced by ten times that. In other countries such as Malaysia, however, lending rates are required to be calibrated with policy rates. In Communist Vietnam, the government is driving state-owned lenders to extend credit as it pushes to achieve economic growth to 10% a year.

“Household credit demand has responded uncharacteristically weakly to the recent monetary policy easing cycle in Asia,” ANZ analysts led by Sanjay Mathur and Dhiraj Nim wrote in a Nov. 6 report.

Source: Business World

Who Is an Innocent Purchaser for Value?

Imagine this: you are the rightful owner of a piece of land. One day, you discover that a distant relative has forged your signature on a deed of absolute sale and managed to secure a new title in their own name. Before you can react, they sell the property to someone else — a third party.

You rush to city hall for advice, only to be told that you can’t recover the land because the new buyer is an innocent purchaser for value.

At first, this sounds absurd. How could you lose your property because of someone else’s forgery? But the answer lies in how the Philippines’ land registration system — the Torrens system — works.

Forgery Transfers No Ownership

Let’s start with a basic principle: a forged deed of sale is void from the very beginning.

Under Philippine law, a contract signed without a person’s real consent has no legal effect. In other words, the forger acquires nothing — and since they have nothing to sell, any sale they make is also void.

So, in theory, you remain the rightful owner.

The Torrens System and the Innocent Buyer

However, the Philippines uses the Torrens system of land registration, which prioritizes the security and reliability of land titles.

Under this system, people are allowed to rely on what appears on the face of the title. If someone buys a property in good faith — believing the title is genuine and clean — the law gives them protection, even if a previous deed was forged.

This type of buyer is called an innocent purchaser for value.

What Makes a Buyer “Innocent”?

A person qualifies as an innocent purchaser for value if they:

• Paid a fair price for the property;

• Checked the title and found it free from any liens, disputes, or defects; and

• Had no knowledge or suspicion that something was wrong with the transaction.

If these conditions are met, the buyer’s title is protected — even if the seller obtained it through fraud or forgery.

That’s why your city hall contact said you might not be able to recover the property. The Torrens system protects the integrity of the buyer’s title, even at the expense of the original owner.

When the Buyer Is Not Innocent

Not all buyers can hide behind the label of “innocent purchaser.”

If the third person knew or should have known that something was wrong — such as a suspiciously low price, a hurried sale, or rumors of family conflict — then they are not considered innocent.

Courts require buyers to act in good faith and with reasonable diligence. If they ignored warning signs, they lose their legal protection, and the true owner can demand the land back through reconveyance or annulment of title.

The Owner’s Remedies

If you find yourself in this situation:

1. Gather all your documents — your original title, tax declarations, tax receipts, and proof that you never sold the land.

2. File a civil case for Annulment of Title and Reconveyance, and a criminal case for Forgery or Falsification against the forger.

3. If the court rules that the buyer was truly innocent, your remedy shifts to claiming compensation from the Assurance Fund under Section 96 of Presidential Decree No. 1529.

An innocent purchaser for value is someone who buys a property in good faith, for fair consideration, and without notice of any defect in the title.

While forgery never transfers ownership, the Torrens system protects innocent buyers to maintain confidence in land transactions.

That means if your property ends up in the hands of such a buyer, you may lose the land itself — but not your right to seek justice and compensation from the real culprit.

Source: Ziggurat Real Estate

Restrictions on purchasing land under CLOA

A CLOA is a legal document issued by the Department of Agrarian Reform (DAR) to farmer-beneficiaries as proof of ownership of agricultural land awarded to them under the government’s Comprehensive Agrarian Reform Program (CARP).

Republic Act (RA) 6657, or the Comprehensive Agrarian Reform Law of 1988 (CARP Law), was enacted to allow landless farmers and farmworkers to own, directly or jointly, the lands they till or to receive a just share of the fruits thereof. To this end, the State redistributed the ownership of all agricultural lands to landless farmers, subject to the landowners’ retention limits and with due regard to their right to just compensation.

However, farmer-beneficiaries under the CARP are subject to certain limitations in terms of sale, transfer or disposal of the land awarded to them. Sections 26 and 27 of the CARP Law, strictly provide a 10-year holding period, the requirement of a prior DAR clearance or approval, and fully-settled amortization payments, before an awarded land may be validly sold to another person, to wit:

Section 26. Payment by Beneficiaries. — Lands awarded pursuant to this Act shall be paid for by the beneficiaries to the LBP in thirty (30) annual amortizations at six percent (6%) interest per annum.

The LBP shall have a lien by way of mortgage on the land awarded to the beneficiary; and this mortgage may be foreclosed by the LBP for non-payment of an aggregate of three (3) annual amortizations. The LBP shall advise the DAR of such proceedings and the latter shall subsequently award the forfeited landholdings to other qualified beneficiaries. A beneficiary whose land, as provided herein, has been foreclosed shall thereafter be permanently disqualified from becoming a beneficiary under this Act.

Section 27. Transferability of Awarded Lands. — Lands acquired by beneficiaries under this Act may not be sold, transferred or conveyed except through hereditary succession, or to the government, or the LBP, or to other qualified beneficiaries for a period of ten (10) years: provided, however, that the children or the spouse of the transferor shall have a right to repurchase the land from the government or LBP within a period of two (2) years. Due notice of the availability of the land shall be given by the LBP to the Barangay Agrarian Reform Committee (BARC) of the barangay where the land is situated. The Provincial Agrarian Reform Coordinating Committee (PARCCOM) as herein provided, shall, in turn, be given due notice thereof by the BARC.

If the land has not yet been fully paid by the beneficiary, the rights to the land may be transferred or conveyed, with prior approval of the DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transfer or conveyance, shall cultivate the land himself. Failing compliance herewith, the land shall be transferred to the LBP which shall give due notice of the availability of the land in the manner specified in the immediately preceding paragraph.

In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one lump sum for the amounts the latter has already paid, together with the value of improvements he has made on the land.

Thus, while the law permits the sale of land under CLOA, it is necessary that the conveyance must comply with the conditions set by the DAR and the provisions of the CARP Law.

Source: Manila Times