Banks’ foreign currency deposit unit (FCDU) loans declined to $17.3 billion as of end-September, down by 3.9 percent from the previous quarter’s $18 billion.
On a year-on-year basis, FCDU loans fell by 3.1 percent from $17.8 billion, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in a statement.
As of end-September, FCDU deposit liabilities were up by 5.5 percent quarter-on-quarter to $43.6 billion, and by 11.7 percent year-on-year.
“The bulk of these deposits (97.6 percent) continue to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves,” said the BSP.
FCDU borrowings’ principal repayments exceeded disbursements resulting to a net repayments overall. Gross disbursements as of end-September stood at $12.2 billion, 8.6 percent higher quarter-on-quarter while loan repayments increased by 11.9 percent.
The BSP said the 3.9 percent quarter-on-quarter decline in FCDU loans “may be due to borrowing firms’ lower working capital requirements and lending banks’ tightening of credit standards attributed largely to less favorable economic outlook, as the ongoing health crisis brought about by the COVID-19 pandemic continued to constrain domestic economic activity.”