FCDU loans drop to $15.1 billion at end-September

OUTSTANDING LOANS granted by banks’ foreign currency deposit units (FCDU) dropped by 5% quarter on quarter as of September, the Bangko Sentral ng Pilipinas (BSP) said.

Loans extended by banks’ FCDUs declined to $15.126 billion at end-September from $15.928 billion at end-June, based on central bank data released on Monday.

Year on year, outstanding FCDU loans also went down by 3.9% from $15.747 billion as of September 2024.

FCDUs are units of local banks or local branches of foreign banks authorized by the BSP to service transactions involving foreign currencies, including deposits and loans.

Resident and nonresident borrowers, including individuals and businesses like importers, use these loans for their foreign currency payables or needs.

The end-September figure reflects $9.77 billion worth of new loans disbursed by FCDUs and $10.56 billion in loan payments, the BSP said.

Of the total outstanding loans, $12.068 billion or 79.8% have medium- to long-term maturities, or those payable in a year or more. This was down from the $12.577 billion as of June, which was 79% of the total.

Short-term loans were at $3.057 billion, accounting for 20.2% of the total. This was also lower than the $3.35 billion (equivalent to 21% of the total) recorded at end-June.

The BSP said $9.592 billion or 63.4% of the outstanding FCDU loans went to Philippine-based borrowers, which were all extended to private sector entities.

These included merchandise and service exporters with $2.51 billion or 26.2% of the total; towing, tanker, trucking, forwarding, personal and other industries with $2.05 billion or 21.4%; and power generation companies with $1.71 billion or 17.8%.

FCDU loans to nonresidents were at $5.534 billion at end-September, which was 36.6% of the total.

Meanwhile, by creditor, local banks granted the bulk or 84% of the outstanding FCDU loans at end-September with $12.713 billion. Of this, $12.682 billion came from commercial banks, while $30 million was from thrift banks.

Foreign bank branches or subsidiaries extended $2.413 billion or 16% of the loans during the period.

Preliminary central bank data also showed that banks’ FCDU deposit liabilities inched up by 0.1% to $60.732 billion as of end-September from $60.669 billion as of end-June.

Meanwhile, year on year, it rose by 5.69% from $57.464 billion previously.

This brought the FCDU loans-to-deposits ratio to 24.9% at end-September, lower than 26.3% as of June and 27.4% the prior year. — Katherine K. Chan