FCDU loans reach $11.38 B

MANILA, Philippines - Loans extended by banks’ foreign currency deposit units (FCDU) climbed to $11.379 billion in the first quarter, the Bangko Sentral ng Pilipinas reported yesterday.

“The rising trend in outstanding FCDU loans observed (since) 2013 may be attributed to the low interest rate rate environment, broadly stable exchange rate, high liquidity position of banks and positive business sentiment arising from strong macroeconomic fundamentals,” the central bank explained.

The current level is 8.9 percent higher than the $10.452 billion recorded in end-2013.

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

Some 58 percent or $6.653 billion of the borrowings were payable in more than a year, while the remaining $4.726 billion were short-term accounts.

Philippine residents mainly from the private sector made the bulk of borrowings at $8.369 billion, while non-residents accounted for $3.01 billion.

Loans extended to resident borrowers mainly funded public utility firms; producers/manufacturers, including oil companies; and merchandise and service exporters.

The central bank said gross disbursements in the first quarter went up 15 percent to $12.9 billion from the $11.2 billion recorded in end-December.

At the same time, FCDU deposit liabilities grew 5.9 percent to $27.4 billion in the first quarter from end-2013. Majority or 97.1 percent of the deposits were made by resident accounts, the central bank noted.

The BSP further said the loans-to-deposit ratio continued to increase to 41.5 percent in the first quarter due to a rise in both loans and deposits.