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FCDU Loans Down 7 Percent in Second Quarter

09.22.2006

As of end-June 2006, outstanding loans granted by Foreign Currency Deposit Units (FCDUs) of banks amounted to US$3.862 billion, reflecting a decline of almost seven percent from the end-March 2006 level of US$4.149 billion.

On a year-on-year basis, the FCDU loan portfolio dropped by US$761 million (or 16 percent) as loan repayments outpaced new loans granted.

An FCDU is a unit of a local bank or of a local branch of a foreign bank authorized by the Bangko Sentral to engage in foreign exchange denominated transactions, such as accepting foreign currency deposits and granting of foreign currency loans.
 
The contraction in the stock of FCDU loans in the second quarter resulted principally from repayments exceeding availments by about US$290 million. Around 89 percent of funds disbursed during the period were short-term in nature, mainly to oil companies.
 
Private sector accounts grew by 1 percent and represented 67 percent of outstanding loans.  In terms of maturity, 64 percent of the accounts had medium to long-term maturities, i.e., exceeding one year.  Major beneficiaries of FCDU loans included public utility firms, exporters, and producers/ manufacturers, including oil companies.

FCDU deposit liabilities rose by US$832 million (or 5 percent) from the end-March 2006 level to reach US$17.488 billion by end-June 2006. The bulk of these deposits (95 percent) were owned by residents.

The overall FCDU loans-to-deposits ratio (which relates the current period’s loan portfolio to the level of FCDU deposits two quarters back) dropped to 23.2 percent in June 2006 from 26 percent in March 2006 due to the decline in loans and increase in deposit liabilities. 

Please refer to attached table for details.

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