FCDU loans rise 5.6 percent in second quarter

Foreign currency loans extended by banks rose 5.6 percent to $16.31 billion in the second quarter from $15.44 billion in the previous quarter, driven mainly by higher borrowing from export-oriented companies and other industries.

The Bangko Sentral ng Pilipinas (BSP) said outstanding loans handled through foreign currency deposit units (FCDUs) reached $16.31 billion at end-June, up from $15.44 billion three months earlier. On a year-on-year basis, FCDU loans grew 2.4 percent.

FCDUs handle foreign currency transactions for local banks and authorized local branches of foreign banks. The BSP said FCDU loans support activities requiring foreign exchange, including those of importers, businesses and individuals with foreign currency transactions.

Philippine-based borrowers accounted for $11.65 billion, or 71.5 percent, of total FCDU loans, while the remaining $4.65 billion, or 28.5 percent, went to nonresidents.

Among local borrowers, companies engaged in towing, tanker, trucking, forwarding, personal and other industries accounted for the largest share at $3.07 billion, or 26.3 percent. Merchandise and service exporters followed with $2.85 billion, or 24.5 percent, while power generation companies accounted for $1.86 billion, or 16 percent.

BSP data showed that medium- and long-term loans continued to account for most FCDU lending, although their share declined to 73.3 percent from 77.1 percent in the previous quarter. Short-term loans made up the remaining 26.7 percent.

Banks disbursed $11.99 billion in FCDU loans during the second quarter, while loan payments collected during the period amounted to $11.20 billion.

Local banks accounted for $13.38 billion, or 82.1 percent, of outstanding FCDU loans, with commercial banks alone holding $13.36 billion. Foreign bank branches and subsidiaries accounted for the remaining $2.93 billion, or 17.9 percent.

Meanwhile, FCDU deposit liabilities stood at $60.11 billion at end-June, down 0.9 percent from $60.67 billion a year earlier.

The overall FCDU loans-to-deposits ratio rose to 27.1 percent in the second quarter from 25.4 percent in the previous quarter and 26.3 percent a year earlier. The BSP release also showed weighted average interest rates of 4.0137 percent for short-term loans and 5.1153 percent for medium- and long-term loans at end-June.