Loans of Foreign Currency Deposit Units Grew by 1.9 percent in the Third Quarter of 2019

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno announced today that as of end-September 2019, outstanding loans granted by Foreign Currency Deposit Units (FCDU) of banks stood at US$17.8 billion, higher by US$338 million (or by 1.9 percent) from the end-June 2019 level of US$17.5 billion as disbursements exceeded principal repayments. Year-on-year, FCDU loans increased by US$1.7 billion (or by 10.8 percent) from the end-September 2018 level of US$16.1 billion. The growth in loans may be attributed to borrowing firms' higher working capital requirements.

As of end-September 2019, 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 (1) year], which represented 77.5 percent of total, higher than the 76.7 percent level as of end-September 2018.

The bulk of outstanding loans went to the following resident industries: towing, tanker, trucking, forwarding, personal and other industries (23.7 percent); merchandise and service exporters (15.3 percent); public utility firms (8.3 percent); and producers/manufacturers, including oil companies (4.9 percent).

Gross disbursements in the third quarter of 2019 reached US$17.3 billion and were 3.7 percent higher than the previous quarter's figure due to increase in funding requirements of an affiliate of a branch of a foreign bank. Similarly, loan repayments were higher by 5.7 percent, thus, resulting in overall net disbursements.

FCDU deposit liabilities stood at US$41.1 billion as of end-September 2019, slightly lower by US$212 billion (0.5 percent) from the end-June 2019 level of US$41.3 billion, with the bulk (96.9 percent) continuing to be held by residents; these essentially constitute an additional buffer to the country's gross international reserves. Year-on-year, FCDU deposit liabilities increased by US$2.4 billion (or by 6.1 percent) from the end-September 2018 level of US$38.8 billion.

Source: Bangko Sentral ng Pilipinas (BSP)