FCDU loans grow 1.3% in Q1

Published August 1, 2020, 10:00 PM

by Lee C. Chipongian

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said the outstanding loans of banks’ foreign currency deposit units (FCDUs) went up by 1.3 percent in the first quarter to $18.3 billion compared to the previous quarter’s (end-December 2019) $18 billion. 

As always noted, the BSP said FCDU loans increased by $239 million during the period as disbursements exceeded principal repayments. 

On a year-on-year basis, FCDU loans grew by 8.7 percent or by $1.5 billion from $16.8 billion same time in 2019.

“The growth in loans may be attributed to borrowing firms’ higher working capital requirements, lower interest rates as well as increased investment in plant or equipment,” said the BSP.

FCDU deposit liabilities also increased by 4.9 percent quarter-on-quarter to $43.1 billion. It is up by $2 billion from end-December 2019’s $41.1 billion. On a year-on-year basis, deposit liabilities increased by 7.8 percent or $3.1 billion from $40 billion.

The BSP said the “bulk of these deposits (98 percent) continue to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves.”

The FCDU loans’ maturity profile as of end-March remained predominantly medium- to long-term debt or those payable over a term of more than one year, which represented 79.5 percent of total, higher than the 75.8 percent same time in 2019, said the BSP.

The BSP in the statement said that of the 64.8 percent outstanding loans to residents, 51.8 percent went to: power generation companies (18 percent); merchandise and service exporters (13.9 percent); public utility firms (7.8 percent); towing, tanker, trucking, forwarding, personal and other industries (6.9 percent); and producers/manufacturers, including oil companies (5.2 percent).

In the first quarter, the BSP registered gross disbursements of $14.3 billion, 7.8 percent higher than the previous quarter. There was an overall net disbursements since loan repayments also increased by 7.2 percent.