UnionDigital Bank (UD), the digital bank subsidiary of Aboitiz-led Union Bank of the Philippines is set to launch low-tenor loans under ₱30,000 in the fourth quarter of 2025 as its top executive believes this move is a more disciplined approach to take.

“We have recently introduced a longer tenor, but Union Digital is going to be concentrated at least in the near future on low tenor loans. Because I think that's the more disciplined way to do,” Danilo Mojica II, UnionDigital Bank’s president and CEO, told reporters on the sidelines of UD’s launch of its digital banking products and services designed to help unbanked Filipinos.

Mojica noted that the smaller loans would target borrowers who need quick, short-term financing.

Currently, the digital bank focuses on payroll lending for employees of partner companies, offering loans ranging from ₱30,000 to ₱50,000 with repayment terms of three to nine months, targeting lower-income segments.

UD has yet to finalize its disbursement target for cash loans this year as it continues to validate the program under its “low and grow” strategy. The digital bank is taking a cautious approach to lending.

Mojica said loan disbursements may be smaller this year under its current strategy, but the focus on disciplined, targeted lending is expected to yield stronger asset quality and profitability compared to last year’s rapid but riskier growth.

“It is better to be small and profitable than to be big with major NPLs. That is the reason why in the context of a smaller disbursement base, numbers are significantly more disciplined than what they used to be,” Mojica noted.

Mojica said that the digital bank’s soured loans or non-performing loans (NPLs) under its restructured operations since late last year are now within single-digit levels, although this was not disclosed. These are significantly lower than previous figures, following tighter lending discipline and cost controls, he noted.

UD will further expand its services with the upcoming launch of UD Cash Loans, a streamlined digital loan product that will be made available through the UD app.

UD’s launch of new products aims to give financial access for the 37.6 million Filipino adults who remain unbanked.

“It aims to make digital banking, accessible, and empowering—especially for first-time users among sari-sari store owners, ride-sharing drivers, daily wage earners, and informal workers,” UD said in a statement.

With first-time borrowers as the target client, the offerings remove the need for collateral and lengthy documentation. It also plans to launch a VISA-powered virtual card for secure online transactions, helping more users join the digital economy.