Banks’ FCDU loans rise to $15.7 billion

MANILA, Philippines — Foreign currency loans granted by banks inched up by 0.7 percent to $15.75 billion as of end-September 2024 from the end-June level of $15.63 billion, according to the Bangko Sentral ng Pilipinas (BSP).

In a statement, the BSP said the outstanding loans granted by banks’ foreign currency deposit units (FCDU) increased by $114 million as disbursements exceeded principal repayments.

The latest figure also rose by $246 million or 1.6 percent from the $15.5 billion seen in end-September 2023.

As of end-September, the central bank said the maturity profile of the FCDU loan portfolio remained predominantly medium to long-term debt or those payable over a term of more than one year that accounted for 77 percent of the total, slightly higher than the 76.7 percent from the previous quarter.

FCDUs are units of local banks or local branches of foreign banks authorized by the central bank to process transactions involving foreign currencies, mainly by accepting deposits and handing out loans.

The BSP said $9.68 billion or 61.5 percent of the total loans were extended to Philippine residents. Majority of which went to industries such as merchandise and service exporters ($2.49 billion or 25.7 percent), towing, tanker, trucking, forwarding, personal and other industries ($2.08 billion or 21.5 percent) and power generation companies ($1.92 billion or 19.9 percent).

Meanwhile, gross disbursements went up by 9.4 percent to $21.77 billion in the third quarter from $19.9 billion as of end-June due to the increase in funding requirements of a foreign bank branch affiliate.

Loan repayments as of end-September stood at $21.68 billion, 6.6 percent higher than the previous quarter’s $20.33 billion. These resulted in overall net disbursement.

FCDU deposit liabilities reached $57.46 billion, higher by 4.2 percent than the end-June level of $55.16 billion and by 10.9 percent from the end-September 2023 level of $51.8 billion.

“The bulk of these deposits ($56.12 billion or 97.7 percent) continued to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves,” the central bank said.