FCDU loans down 5%

Loans against foreign currency deposits dropped by five percent to $4.898 billion during the third quarter of 2002.

Data from the Bangko Sentral ng Pilipinas (BSP) shows that foreign currency deposit units (FCDUs) of commercial and thrift banks likewise dropped by 15.4 percent compared to the nine-month level in 2001.

In contrast, the BSP said peso loans stood at P1.159 billion, up by 3.9 percent and 4.7 percent from the previous quarter and the previous year, respectively.

According to the BSP, this is an indication that borrowers prefer peso borrowings to foreign currency borrowings principally to avoid exposure to foreign exchange risks due to the depreciation of the peso.

The BSP said the decline in FCDU loans during the third quarter of last year resulted from net repayments as disbursements were outpaced by principal repayments.

According to the BSP, however, the decline was also a direct result of the downward adjustment due to the reclassification of accounts and revaluation of third currency denominated loans into US dollars which continued to appreciate during the period.

BSP data showed that FCDU loans to resident borrowers, which accounted for 96.6 percent of total deposits, barely changed during the first nine months, while residents continued to account for the bulk of deposits.

Exporters continued to be the top beneficiaries of FCDU loans, accounting for 27.3 percent of the total, followed by public utilities which had a 24.6-percent share.

The overall FCDU loans-to-deposit ratio, on the other hand, dropped slightly from 38.3 percent in the first six months to 38.2 percent. Foreign bank branches posted the highest loans-to-deposits ratio which reached 444 percent for the international Commercial Bank of China and 309 percent for Mizuho Corporate Bank. – Des Ferriols