By Lee C. Chipongian Banks’ foreign currency deposit units or FCDU loans decreased by 4.2 percent to $15.7 billion in the second quarter from the previous quarter’s $16.4 billion mainly due to repayments, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonancier said. BSP Deputy Governor Chuchi G. Fonacier Compared to same time last year, FCDU loans declined by 11.91 percent or from $14 billion. Fonacier said principal repayments exceeded disbursements in the second quarter, resulting to lower FCDU loans. Gross disbursements in the second quarter amounted to $14.6 billion, six percent lower quarter-on-quarter. Loan repayments, in the meantime, increased by 4.9 percent for an overall net principal repayments of $676 million. FCDU deposit liabilities also decreased by 1.3 percent to $37.9 billion from last quarter’s $38.4 billion. About 97.1 percent are held by residents and serves as additional buffer to the country’s foreign exchange/assets reserves which as of end-August totaled $77.93 billion. The maturity mix of the loan portfolio remained biased towards medium- to long-term debts or those payable over a term of more than one year, which represented 75.6 percent of total, said the BSP. FCDU loans were used for these industries: 24.6 percent for towing, tanker, trucking and forwarding; 20 percent for merchandise and service exporters; 10 percent for public utility firms; and four percent for producers/manufacturers, including oil companies. Since the BSP was adopting the Basel 3 liquidity coverage ratio or LCR this year, it has scrapped banks’ required liquid assets against a bank’s holdings of government deposits and the liquid asset cover. The BSP also removed the currency cover requirement for FCDUs. Basically it removed the liquidity requirements for foreign currency denominated liquid assets equivalent to at least 30 percent of FCDU liabilities and foreign currency denominated assets equivalent to 70 percent of FCDU liabilities in the same currency as the liability.