FCDU loans up 21%

MANILA, Philippines - Loans extended by banks’ foreign currency deposit units (FCDU) jumped 21 percent in 2013 from the previous year on the back of an upbeat economic sentiment in the country, the Bangko Sentral ng Pilipinas (BSP) said.

“An uptrend was consistently noted during the four quarters of the year which may be attributed to more vibrant business activities arising from the overall positive sentiment due to strong macroeconomic fundamentals,” the BSP said.

Central bank data showed FCDU loans amounted to $10.452 billion last year, up from $8.665 billion recorded in 2012.

An FCDU is the bank’s unit authorized to engage in foreign currency transactions such as accepting deposits and extending loans.

More than three-fifths or $6.52 billion of the loans were payable in more than a year or those classified as medium- and long-term borrowings. The remaining $3.932 billion were made up of short-term accounts.

The BSP also said the bulk or $8.309 billion were borrowed by Philippine residents who were mainly from the private sector. These loans largely benefited public utility firms; producers and manufacturers including oil companies; and merchandise and service exporters.

Gross disbursements more than doubled to $36.3 billion last year, a big part of which went to working capital requirements to support business operations.

Loan repayments during the period ballooned 118 percent to $34.5 billion, resulting in a net disbursement of $1.8 billion.

At the same time, FCDU deposit liabilities amounted to $25.9 billion in end-2013, up three percent from the previous year. The bulk or 97.5 percent of the deposits were made by resident accounts, the BSP said.

The central bank said loans-to-deposit ratio climbed to 40.3 percent last year from 34.4 percent in 2012 amid a 21 percent expansion in loans and a three percent growth in deposits.