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FCDU Loan Portfolio Up by 2 Percent in First Quarter

07.11.2005

The local foreign currency deposit system established in 1970 remains an important component of the country’s financial system by providing, among others, foreign currency credits to local entrepreneurs to support the growth and development of vital industries and other sectors of the economy.

As of end-March 2005, outstanding loans granted by Foreign Currency Deposit Units (FCDUs) of banks stood at US$4,606 million, reflecting an expansion of US$80 million or about 2 percent  from the end-2004 level of US$4,526 million.  Peso loans from commercial banks were similarly observed to have grown by 2 percent during the same period, indicating positive business sentiment.

Loan disbursements during the quarter reached US$1,218 million and were US$218 million higher than the previous quarter’s level. On the other hand, smaller loan repayments were recorded, resulting in a net disbursement of US$109 million.

In terms of borrower profile, public utility firms accounted for 22 percent of the loan portfolio, followed by commodity/service exporters with a 20 percent share. On a sectoral basis, loans to the private sector represented 64 percent of outstanding FCDU credits.

About 71 percent of the FCDU portfolio had medium to long-term maturities (that is, original payment terms exceed one year) reflecting the banks’ willingness to extend long-term credits. 

In line with existing procedures, the loans-to-deposits ratio is computed using the current period’s loans and deposits level of two quarters back (September 2004).  The growth in FCDU deposits was sustained, further rising from US$14.33 billion in March 2004 to US$14.98 billion by September 2004, with the bulk (about 94%) provided by residents. Thus, notwithstanding the moderate growth in FCDU loans during the current quarter, the overall loans-to-deposits ratio dropped from 31.1 percent as of end-2004 to 30.6 percent by March 2005.

Please refer to attached Annex for details.

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