BSP Acting Governor Alberto V. Reyes said there is no cause for alarm since the drop in the FCDU deposit liabilities was just part of the regular withdrawal of dollars during the weekend.
Monetary authorities said that FCDU deposits will remain healthy after the reinstatement of the tax-exempt privilege on interest earnings on FCDU deposits and the preference of most to hold on to their dollars as one of the safest currency.
The peso recently depreciated to its all time intra-day low of 56.45, prompting some of the FCDU depositors to take advantage of the stronger dollar by exchanging their greenback with the local currency for more value.
In February this year, the lawmakers enacted a measure that gave tax-exempt status on the FCDU interest earnings as well as offshore banking units operating in the country.
For the past months, there was a noted expansion in the FCDU deposit liabilities. In the fourth quarter of 2003, it expanded by $163 million to $13.42 billion.
About 95 percent of the outstanding deposits were owed to residents. The overall loans-to-deposits ratio remained essentially unchanged at 37 percent by the close of 2003.
Private sector accounts represented the bulk (65 percent) of total FCDU portfolio. The largest borrowers were the government financial institutions 25 percent; exporters, 24 percent; and public utility firms, 19 percent.
In terms of maturity, medium and long-term loans (or those with payment terms of more than one years comprised 72 percent of total).
The top five lenders have remained the same since 2001. These consist of four local commercial banks and one foreign bank branch whose combined exposures accounted for 45 percent of the entire FCDU portfolio.