FCDU lending drops by 2.2% in Q4 2023
LOANS extended by banks’ foreign currency deposit units (FCDU) fell in the fourth quarter of last year as principal repayments exceeded disbursements, the Bangko Sentral ng Pilipinas (BSP) reported late Wednesday.
As of end-December, FCDU loans stood at $15.2 billion, down 2.2 percent from $15.5 billion in the third quarter or 3.9 percent from $15.8 billion a year earlier.
The increased repayments, the BSP noted, came amid high interest rates for both short-term and medium- to long-term loans.
The maturity profile of FCDU loans remained predominantly medium to long term at 78.6 percent, higher than the 77.6 percent posted in the previous quarter.
Loans granted to residents totaled $9.2 billion or 60.6 percent of all FCDU loans. These were mostly secured by power generation firms ($2.3 billion or 25.0 percent); merchandise and service exporters ($2.3 billion or 25.0 percent); and towing, tanker, trucking, forwarding, personal and other industries ($1.2 billion or 12.8 percent).
Gross disbursements reached $18.0 billion in October-December, 5.4 percent higher than the $17.1 billion recorded in the previous quarter. This was attributed to an “increase in funding requirements of a foreign bank branch affiliate.”
Loan repayments, likewise, rose to $18.4 billion — 8.4-percent up from $17.0 billion in the third quarter and which resulted in an overall net principal repayment.
FCDU deposit liabilities hit a record $54.4 billion, 5.1 percent higher than the end-September 2023 level of $51.8 billion.
“This is mainly due to the surge in FCDU time certificate of deposits owned by resident individuals which aligns with the uptick in the remittances from overseas Filipinos,” the central bank said.
The majority of these deposits — $53.0 billion or 97.4 percent — remained under the ownership of residents, effectively serving as a gross international reserves buffer.
Year on year, FCDU deposit liabilities grew by 13.7 percent from the $47.8 billion recorded at the end of December 2022.