Why business loans are more expensive and what SMEs can do about it

If you're finding business loans becoming more and more expensive by the month, you're not alone.

In an effort to control inflation, the Bangko Sentral ng Pilipinas (BSP) has raised key interest rates multiple times this year to get consumers to spend less and save more. The latest hike raised the overnight lending interest rate to 4.75 percent. This means banks and lenders are paying higher to borrow money from the BSP, which they'll have to pass on to borrowers. This is the biggest external factor making business financing more expensive.