FCDU loans up 2.6% to $12.5 B in 2016

MANILA, Philippines - Foreign currency loans extended by local banks remained steady, inching up 2.6 percent last year, data released by the Bangko Sentral ng Pilipinas (BSP) over the weekend showed.

BSP Governor Amando Tetangco Jr. said outstanding loans granted by foreign currency deposit units (FCDUs) of banks amounted to $12.51 billion in end-December last year, higher by $315 million from $12.19 billion in end-December 2015.

He attributed the increase to the positive adjustments amounting to $12 million due to exchange rate movements and other audit adjustments.

FCDU refers to units of a local bank or of a local branch of a foreign bank authorized by the BSP to engage in foreign currency-denominated transactions. 

He said gross disbursements amounted to $13.1 billion in end-December. Of the total amount, about 93.9 percent have short-term maturities or those with original maturities of up to one year while the rest have long-term maturities.

“Disbursements exceeded principal repayments,” he added.

The FCDU loan portfolio in end-December was almost unchanged from the end-September level of $12.44 billion.

According to him, outstanding loans to resident borrowers slipped to $8.42 billion in end-December from $8.48 billion in end-September.

Major beneficiaries of the loans were merchandise and service exporters with $3.1 billion; towing, tanker, trucking, forwarding, personal & other individuals with $2.5 billion; public utility firms with $1.3 billion; producers or manufacturers, including oil companies with $600 million as well as holding and stock brokerage with $500 million. 

On the other hand, about $500 million went to other borrowers including the public sector.

Outstanding FCDU loans were mostly medium- to long-term or those payable over a term of more than one year representing 70.4 percent of total while short-term accounts comprised 29.6 percent.

FCDU deposit liabilities went up 2.9 percent to $35.9 billion in end-December from $34.9 billion in end-September. The bulk of deposits at 97.6 percent continued to be held by residents.

FCDU deposits represent additional source of foreign exchange liquidity for the economy helping the country survive external shocks.