FCDU loans rise on strong dollar demand – BSP
Photo courtesy of Philippine News Agency
Daily TribunePhoto courtesy of Philippine News Agency
Loans extended by banks’ foreign currency deposit units (FCDUs) rose in the fourth quarter of 2025, reflecting steady demand for dollar funding from Philippine-based firms, according to the latest data from the Bangko Sentral ng Pilipinas (BSP).
In a recent statement, the central bank said FCDU loans reached $15.56 billion (about P933.6 billion) as of end-December 2025, up 2.9 percent from $15.13 billion (about P907.8 billion) in the previous quarter.
The increase was supported by higher lending activity during the quarter, with $8.32 billion (P499.2 billion) in new loans offsetting $7.87 billion (P472.2 billion) in repayments, resulting in a net expansion in outstanding credit. Philippine-based borrowers continued to account for the bulk of demand, comprising 66.8 percent of total FCDU loans, while the remaining share went to non-residents.
Among domestic sectors, merchandise and service exporters led with a 25.6-percent share, followed by transport and related industries such as trucking and forwarding (24.1 percent), and power generation companies (16.7 percent).
Most of the loans remained longer-term in nature, with 79.2 percent carrying maturities of more than one year, indicating continued use of foreign currency financing for investment and expansion activities.
Despite the quarter-on-quarter increase, FCDU loans were still 1.6 percent lower year-on-year, suggesting some moderation in foreign currency borrowing compared to 2024 levels.
This came even as foreign currency deposits continued to grow. FCDU deposit liabilities rose by 7.9 percent to $59.83 billion (about P3.59 trillion), highlighting ample dollar liquidity in the banking system.
FCDU loans are dollar-denominated credit facilities extended by local and foreign banks operating in the Philippines, typically used to finance trade, imports and other foreign exchange-related transactions.
The BSP said the latest data reflect sustained demand for foreign currency financing, particularly from export-oriented and infrastructure-related sectors, even as overall borrowing levels remain slightly below year-ago levels.