APD | Phillipines: Loans of foreign currency deposit units rose by 1.9 percent in Q3

By APD writer Melo M. Acuña

**MANILA, Dec. 27 (APD) ** – Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said as of end-September 2019, outstanding loans granted by Foreign Currency Deposit Units (FCDU) of banks amounted to US$17.8 billion, higher by US$338 million or by 1.9 percent from the end-June 2019 level of US$17.5 billion as disbursements exceeded principal repayments.

In a statement released today, the BSP said year-on-year, FCDU loans increased by US$1.7 billion or by 10.8 percent from the end-September 2018 level of US$16.1 billion.

“The growth in loans may be attributed to borrowing firms’ higher working capital requirements,” the BSP statement said.

As of end-September 2019, the maturity profile of the FCDU loan portfolio remained predominantly medium to long-term debt (or those payable over a term of more than one (1) year, which represented 77.5 percent of total, higher than the 76.7 percent level as of end-September 2018.

The bulk of outstanding loans went to the towing, tanker, trucking, forwarding, personal and other industries (23.7 percent), merchandise and service exporters (15.3 percent), public utility firms (8.3 percent), and producers/manufacturers, including oil companies (4.9 percent).

Gross disbursements in the third quarter of 2019 amounted to US$17.3 billion and were 3.7 percent higher than the previous quarters’ figure because of an increase in funding requirements of an affiliate of a branch of a foreign bank. Comparably, loan repayments were higher by 5.7 percent, resulting in overall net disbursements.

The BSP said FCDU deposit liabilities remained at US$41.1 billion as of end-September 2019, slightly lower by US$212 million (0.5 percent) from the end-June 2019 level of US$41.3 billion, with the bulk (96.9 percent) continuing to be held by residents, which essentially constitute an additional buffer to the country’s gross international reserves.

“Year-on-year, FCDU deposit liabilities increased by US$2.4 billion or by 6.1 percent from the end-September 2018 level of US$38.8 billion,” the BSP statement concluded.

(ASIA PACIFIC DAILY)