The BSP reported today that total FCDU loans declined further by 5 percent from $8.34 billion at end-September 1998 to $7.92 billion as of end-December 1998. This brought the total loan decline for the whole of 1998 to 24 percent. Meanwhile, total deposits increased by 4 percent in 1998, to $15.08 billion at end-December 1998.
The decrease in FCDU loans may be attributed largely to the continued imposition of the minimum 30 percent liquid asset cover as well as continued caution in bank lending. Demand for foreign currency loans also remained subdued. As a result of declining outstanding loans, the liquidity of the FCDU system improved further as reflected in the lower loan-to-deposit ratio of 52.6 percent, down from 71.6 percent a year ago.
Although exporters were still the major beneficiaries of FCDU loans, their share declined in terms of value and share (USD3,244.2 million or 41 percent of the total compared to end-September’s USD3,646.9 million or 44 percent). Other large borrowers were public utilities (USD1,814.4 million or 23 percent), oil companies (USD303.7 million or 4 percent), producers/manufacturers (USD117.1 million or one percent).
Loans to other private sector borrowers (including USD176.1 million which went to non-residents) accounted for 23 percent (USD1,851.1 million) of total outstanding loans compared to last quarter’s 27 percent (USD2,267.9 million).New foreign bank branches authorized under R.A. No. 7721, otherwise known as “An Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines” accounted for USD1,077.1 million (or 14 percent) while the balance of USD1,067.0 million (or 13 percent) were granted by the four (4) foreign banks established prior to said law.