FCDU loans slightly lower at $15.7 B in Q3
A total of $15.67-billion loans have been released by banks' foreign currency deposit units (FDCU) as of end-September, down by $164 million or 1.1 percent compared with $15.84 billion in the same period in 2021, data from the Bangko Sentral ng Pilipinas (BSP) showed.
On a quarter-on-quarter basis, FCDU loans decreased by $44 million or 0.3 percent compared to end-June’s $15.71 billion.
FCDUs are units of local banks or branches of foreign banks authorized by the BSP to transact in foreign-currency denominated deposits, and to invest and buy foreign exchange.
The BSP late Thursday, Dec. 30, said the decrease in FCDU loans were because of the following: the gradual move in easing credit parameters and net tightening of overall credit standards of lender banks resulting in an unchanged or deliberate lending operations and credit activity amid uncertainty in the economic outlook; and borrowers’ reduced demand for FCDU loans in light of foreign exchange volatility and rising borrowing costs.
As of end-September, gross disbursements totaled $14.6 billion, 6.6 percent lower from the previous quarter ending in June.
Loan repayments, meantime, totaled $14.6 billion, down by eight percent from the previous quarter. These resulted in overall net disbursement, said the BSP.
FCDU deposit liabilities during the period was at $45.8 billion. It was lower by $102 million or 0.2 percent from end-September 2021 of $45.9 billion.
On a quarter-on-quarter basis, deposit liabilities also decreased by $838 million or 1.8 percent from the end-June’s $46.6 billion. “The bulk of these deposits (97.3 percent) continue to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves,” noted the BSP.
FCDU deposit liabilities are considered another US dollar reserves for the country, to complement the BSP’s gross international reserves which as of end-November was at $95.1 billion.
As of end-September, about 78.5 percent of FCDU loan portfolio are mostly medium- to long-term debt or those payable over a term of more than one year.
The BSP said 63.9 percent of all FCDU loans or $10 billion were granted to residents.
The power generation companies borrowed 27.4 percent or about $2.7 billion while the merchandise and service exporters had 24.4 percent or $2.4 billion of the total FCDU loans. The management/holding and stock brokerage industry had 12.3 percent or $1.2 billion of these foreign currency loans.