Commercial Construction Loans in the Philippines: What You Need to Know in 2026
Building a commercial property in the Philippines — whether it's a warehouse, office building, mixed-use development, or retail space — requires significant capital. Unlike a standard home loan or residential construction loan, a commercial construction loan is a specialized financial product designed to fund the building of income-generating properties. In 2026, demand for these loans has grown alongside the country's ongoing infrastructure expansion and the rise of mid-market commercial real estate developments outside Metro Manila.
This guide breaks down which Philippine banks offer commercial construction loans, what rates and LTV ratios to expect, how to qualify, and what documentation you'll need to prepare.
What Is a Commercial Construction Loan?
A commercial construction loan is a short- to medium-term facility that finances the construction phase of a commercial real estate project. Unlike a term loan where you receive the full amount upfront, construction loans are typically drawn in tranches — you receive funds in stages as construction milestones are completed and verified.
Once construction is complete, the loan either matures (requiring full repayment or refinancing) or converts into a long-term commercial mortgage. This two-phase structure is standard across most Philippine banks offering the product.
Commercial vs. Residential Construction Loans
- Purpose: Commercial loans fund income-generating properties (offices, warehouses, retail centers, mixed-use buildings). Residential construction loans fund homes and subdivisions.
- Loan amounts: Commercial loans typically start at 5,000,000 and can reach hundreds of millions of pesos for large developments.
- Interest rates: Commercial construction rates are generally higher than residential, often ranging from 7.5% to 11% p.a. depending on the bank and borrower profile.
- LTV ratios: Banks typically lend 60% to 80% of the appraised project cost or property value, requiring the borrower to contribute at least 20% to 40% in equity.
- Repayment terms: Construction periods of 12 to 36 months are common, with term loan conversion periods of 5 to 20 years.
Which Banks Offer Commercial Construction Loans in the Philippines?
Not all Philippine banks actively market commercial construction loans — many handle them on a case-by-case basis through their corporate or commercial banking divisions. Below is an overview of the major lenders and what they typically offer:
BDO Unibank
BDO is one of the most active lenders in the commercial real estate space. Their commercial construction facilities are handled through BDO's Corporate Banking and SME Banking divisions depending on the project size. Loan amounts generally start at 5,000,000 for SME borrowers, with larger facilities available for corporate clients. BDO typically requires a 30% equity contribution and conducts its own project feasibility assessment. Rates are priced based on the bank's reference rate plus a spread, often landing between 8% and 10% p.a. for commercial projects in 2026.
BPI (Bank of the Philippine Islands)
BPI offers commercial property loans that can include construction components, particularly for mixed-use and mid-market commercial developments. BPI's commercial lending team works closely with developers and SME borrowers on project financing. They typically lend up to 70% of the appraised collateral value. BPI is known for being thorough in its credit evaluation, placing significant weight on the borrower's track record and the project's income projections.
Metrobank
Metrobank's Commercial Banking Group handles commercial construction financing, particularly for medium to large-scale developments. They are active in industrial property, office development, and mixed-use projects. Their LTV ratios are conservative — typically 60% to 70% — and they require comprehensive project documentation including architectural plans, building permits, and a detailed construction timeline.
Security Bank
Security Bank is an active player in commercial real estate lending and has been known to offer competitive pricing for well-qualified borrowers. Their commercial team evaluates projects holistically, including the developer's experience and the end-use of the property. If you're an existing Security Bank client or have a strong deposit relationship, you may receive preferential pricing.
RCBC (Rizal Commercial Banking Corporation)
RCBC's Commercial and Corporate Banking divisions handle construction loan applications for commercial projects. They are particularly active with mid-market developers and SME borrowers building commercial warehouses, logistics facilities, and retail properties. RCBC typically requires a minimum 25% to 30% equity contribution.
PNB (Philippine National Bank)
PNB offers commercial real estate loans including construction financing through its business banking channels. They serve a mix of SME developers and corporate borrowers, with competitive rates for clients who maintain strong financial statements and clean credit histories.
UnionBank and EastWest Bank
Both UnionBank and EastWest Bank have commercial real estate lending programs, though they tend to focus more on established borrowers with proven development track records. UnionBank has invested in its digital lending infrastructure, which can speed up initial credit evaluations.
Landbank and DBP
For projects with a social or economic development component — such as agricultural processing facilities, socialized commercial housing support structures, or provincial commercial centers — Landbank and the Development Bank of the Philippines (DBP) may offer preferential financing terms as part of their mandated lending programs.
How to Qualify: Key Eligibility Requirements
Commercial construction loan eligibility in the Philippines is evaluated differently from a residential home loan. Banks are essentially lending against a project that doesn't yet exist, so they apply stricter scrutiny. Here are the core eligibility criteria:
1. Business and Financial Profile
- Registered business entity (corporation, partnership, or sole proprietorship) with at least 2 to 3 years of operating history
- Audited financial statements for the past 2 to 3 years showing sufficient income and net worth
- Positive net income or strong EBITDA to support debt service coverage (most banks require a DSCR of at least 1.2x to 1.5x)
- Good credit history with no major defaults or restructured loans
2. Project Feasibility
Banks will want to see a credible business case for the commercial property. This includes projected rental income, occupancy assumptions, project cost breakdowns, and construction timelines. Properties with pre-committed tenants or pre-sale contracts significantly improve approval chances.
3. Collateral and Equity
The land on which construction will occur typically serves as the primary collateral. Banks will conduct an independent appraisal. You'll need to demonstrate equity of at least 20% to 40% of total project cost. In most cases, the land value itself counts toward your equity contribution.
4. Developer Experience
If you are developing as a business (rather than building a single commercial property for your own use), banks will scrutinize your track record. Having completed previous commercial projects strengthens your application considerably.
Documentation Checklist
Prepare these documents before approaching any bank for a commercial construction loan:
- Duly accomplished loan application form
- SEC/DTI registration documents and Articles of Incorporation
- Audited financial statements (last 2-3 years)
- Latest interim financial statements
- Income tax returns (last 2-3 years)
- Board resolution authorizing the loan (for corporations)
- TCT or CCT of the land to be used as collateral
- Lot plan and vicinity map
- Approved building plans and specifications
- Building permit or proof of application
- Construction cost estimate from a licensed engineer or contractor
- Construction timeline / Gantt chart
- Project feasibility study or business plan
- List of pre-committed tenants or letters of intent (if applicable)
Understanding Tranche Drawdowns
One of the most important mechanics of a construction loan is the drawdown schedule. Rather than releasing the full loan amount on Day 1, your bank will release funds in tranches tied to construction milestones — for example:
- First drawdown (20-30%): Upon completion of foundation work and submission of inspection report
- Second drawdown (20-30%): Upon completion of structural framing
- Third drawdown (20-30%): Upon completion of roofing, electrical rough-in, and plumbing rough-in
- Final drawdown (10-20%): Upon substantial completion and issuance of occupancy permit
During the construction period, you typically pay interest only on the amount drawn, not on the full committed facility. This helps manage cash flow during the building phase. Once construction is complete and the loan converts to a term facility, regular amortization begins on the full outstanding balance.
What Happens After Construction? Refinancing Options
Many developers and property owners refinance their commercial construction loan once the building is complete and generating income. At this point, the property has an established value and rental history, which can qualify you for better rates on a long-term commercial mortgage.
It's also worth noting that if you've used a residential loan product for any portion of your project — such as financing your own office or mixed-use unit — you may be able to refinance the residential component separately. Nook specializes in residential home loan refinancing and can help you identify whether a lower rate is available for the residential portion of your borrowing. For example, if part of your financing involved a loan from a bank like Security Bank's housing loan product or a BDO home loan, Nook can check whether refinancing that component saves you money.
Key Takeaways
- Commercial construction loans in the Philippines are offered by major banks including BDO, BPI, Metrobank, Security Bank, RCBC, and PNB — primarily through their corporate or commercial banking teams.
- Rates in 2026 typically range from 7.5% to 11% p.a. depending on the borrower, project, and bank.
- LTV ratios of 60% to 80% are standard; expect to contribute 20% to 40% equity.
- Loans are disbursed in tranches aligned with construction milestones, with interest-only payments during the build phase.
- Strong financial statements, project feasibility documentation, and land collateral are the cornerstones of a successful application.
- After construction, refinancing the completed property into a long-term commercial mortgage — or refinancing any residential loan components separately — can reduce your overall borrowing cost.