FCDU loans up 10.2% in ’07

The Bangko Sentral ng Pilipinas (BSP) reported yesterday the outstanding loans granted by Foreign Currency Deposit Units (FCDUs) of banks rose by 10.2 percent to $3.8 billion in 2007.

Full-year data from the BSP showed that FCDU loans went up by $299 million or 8.5 percent from the end-September level of $3.5 billion, indicating a steady and sustained growth on a quarterly and yearly basis.

Year-on-year, the BSP said FCDU loans rose by $354 million from $3.5 billion at end-2006, as new loans exceeded repayments.

BSP Officer in Charge Armando Suratos said the continuing appreciation of the peso against the dollar attracted more FCDU borrowing in 2007.

Suratos said in the report that the outstanding peso loans from commercial, thrift and rural banks posted a bigger growth of 10.9 percent during the same period.

An FCDU is a unit of a local bank or local branch of a foreign bank authorized by the BSP to engage in foreign currency-denominated transactions such as accepting deposits and lending in foreign currency.

The BSP said about 60 percent of the FCDU loan portfolio had medium to long-term maturities. These are loans with original payment terms of more than one year.

According to Suratos, a rising trend in the percentage of medium to long-term or MLT borrowing was observed over the past two quarters in 2007. He said this reflected creditor banks’ ample liquidity and growing confidence to extend longer term money to qualified clients.

The BSP reported that public utility firms accounted for 22 percent of total loan portfolio, followed by commodity and service exporters (21 percent), and producers/manufacturers including oil companies (20 percent).

On the other hand, the private sector absorbed 96 percent of the portfolio, up slightly from 95 percent in September. About 83 percent of outstanding FCDU loans went to Philippine residents. 

FCDU deposit liabilities fell by four percent by end-November to settle at $19 billion from $19.9 billion in September. The bulk or 94 percent of these deposits, the BSP said, were held by residents, including overseas Filipino workers.

With the bigger expansion in FCDU loans compared to deposits, the BSP said the overall loans-to-deposits ratio improved to 20.1 percent as of end-2007 from 18.6 percent a quarter ago.

This ratio referred to proportion of the current period’s loan portfolio to the level of FCDU deposits two quarters ago.