Daily TribuneThe peso depreciation likewise significantly affects the Philippine power industry, particularly the generation sector, since the imported fuel used to operate power plants is priced in dollars.
The outstanding loans granted by Foreign Currency Deposit Units of banks stood at $15.7 billion for June, the central bank data showed.
The Bangko Sentral ng Pilipinas data shows a decrease of $255 million (or 1.6 percent) from the March level of $16.0 billion as principal repayments exceeded disbursements.
The FCDU loans recorded another decline during the second quarter of 2022, following an increase in the first quarter of 2022 since the onset of the pandemic.
The decrease in FCDU loans may be attributed to (a) net tightening of overall credit standards of lender banks as a result of uncertainty in the economic outlook; and (b) borrowers' reduced demand for FCDU loans in light of foreign exchange volatility and rising borrowing costs, the BSP data shows.
"Year-on-year, FCDU loans have decreased by $457 million [or by 2.8 percent] from the end-June 2021 level of $16.2 billion," it added.
Data shows that as of end-June 2022, 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 year), which comprised 79.1 percent of the total, similar to the previous quarter.
"Of the $10.1 billion outstanding loans to residents, 63.3 percent went to the following sector: power generation companies [$2.8 billion or 27.7 percent]; merchandise and service exporters [$2.3 billion or 22.7 percent]; and management/holding and stock brokerage [$1.3 billion or 12.9 percent]," the central bank said.
Moreover, gross disbursements in the second quarter of 2022 reached $15.7 billion. They were 7.0 percent higher than the previous quarter's figure, mainly because of an increase in funding requirements of a foreign bank branch affiliate.
"Similarly, loan repayments in the second quarter of 2022 totaled $15.9 billion, a 10.4 percent increase from the previous quarter's figure. These resulted in overall net repayments," it added.
Furthermore, data shows that "FCDU deposit liabilities stood at $46.6 billion as of June 2022, higher by $306 million [or by 0.7 percent] from March level of $46.3 billion."
"The bulk of these deposits [96.9 percent] continue to be owned by residents, constituting an additional buffer to the country's gross international reserves," data shows.
Year-on-year, FCDU deposit liabilities increased by $968 million (or by 2.1 percent) from the end-June 2021 level of $45.6 billion.
