THE PHILIPPINES’ loan-to-deposit ratio is projected to decline by 2050 as banked Filipinos are expected to borrow less and deposit more as they age, according to a study by the International Monetary Fund (IMF).

In a working paper published earlier this month, IMF Research Officer Haibo Li and senior economists Estelle Liu, Yinqiu Lu, and Anne Oeking said the Philippines’ loan-to-deposit ratio could fall to 48% by 2050 from nearly 80% at present.

The decline would be driven by the projected increase in the share of people aged 65 and above in the country’s total population.

“Financial leverage and risk exposure are lower for older age groups,” the report said. “Both the average loan-to-asset ratio and the average loan-to-deposit ratio by age group show a clear downward trend with age.”

If the projection is realized, the Philippines would have the eighth lowest ratio among Asian economies with data included in the paper, above Hong Kong (-19%), Macao (15%), South Korea (23%), China (26%), Singapore (31%), Japan (37%), and Sri Lanka (38%).

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the Philippine banking system’s gross total loan portfolio stood at P17.781 trillion as of the end of the first half, while deposits amounted to P22.394 trillion during the same period.

This brought the loan-to-deposit ratio to 79.4%, higher than the 76.84% recorded in the same period in 2025.

The loan-to-deposit ratio measures banks’ lending activity relative to deposits and indicates how much of their deposit base has been used for loans. In practical terms, it is one way to track how bank funding is being deployed as the country’s depositor base changes over time.

A lower ratio means a bank is lending out a smaller portion of the total amount it holds in deposits.

The study said the Philippines is in an early dividend demographic state, with older individuals accounting for only 6% of the total population.

That is the second smallest old-age share among selected Asian countries, behind only Mongolia at 5%.

By 2050, the Philippines is projected to have the smallest old-age population in Asia, with an 11% share.

“As populations age, household financial behavior is expected to change — shifting typically toward lower leverage and higher liquidity, including via greater deposit holdings,” the study said.

The IMF also said the country’s loan-to-asset ratio could decline to 47% in 2050 from 53% in 2023. The measure offers another view of bank balance-sheet use, this time comparing loans with total assets rather than deposits.

Latest BSP data showed that the banking industry’s assets reached an all-time high of P31.128 trillion as of end-June, bringing the loan-to-asset ratio to 57.12%. — Katherine K. Chan