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FCDU loans up $239M by May

Joshua Lao

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Outstanding loans granted by Foreign Currency Deposit Units (FCDU) of banks until March stood at $18.3 billion, higher by $239 million, or by 1.3 percent, from the end-December 2019 level of $18 billion as disbursements exceeded principal repayments.

From a year ago, FCDU loans increased by $1.5 billion (or by 8.7 percent) from the end-March 2019 level of $16.8 billion. The growth in loans may be attributed to borrowing firms’ higher working capital requirements, lower interest rates as well as increased investment in plant or equipment.

As of end-March 2020, 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 represented 79.5 percent of total, higher than the 75.8 percent level as of end-March 2019.

Power takes bulk of loans
Of the total 64.8 percent outstanding loans to residents, 51.8 percent went to the following resident industries: power generation companies (18 percent); merchandise and service exporters (13.9 percent); public utility firms (7.8 percent); towing, tanker, trucking, forwarding, personal and other industries (6.9 percent); and producers/manufacturers, including oil companies (5.2 percent).

Gross disbursements in the first quarter of 2020 reached $14.3 billion and were 7.8 percent higher than the previous quarter’s figure due to the increase in funding requirements of an affiliate of a branch of a foreign bank. Similarly, loan repayments were higher by 7.2 percent, thus, resulting in overall net disbursements.

FCDU deposits at $43B
FCDU deposit liabilities stood at $43.1 billion as of end-March, higher by $2 billion (or by 4.9 percent) from the end-December 2019 level of $41.1 billion. The bulk of these deposits (98 percent) continue to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves. Year-on-year, FCDU deposit liabilities increased by $3.1 billion (or by7.8 percent) from the end-March 2019 level of $40 billion.

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