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FCDU Loans Down by 1.7 Percent in Q1 2016


Bangko Sentral ng Pilipinas Governor Amando M. Tetangco, Jr. announced today that as of end-March 2016, outstanding loans granted by FCDUs of banks stood at US$12.0 billion, down by US$203 million (1.7 percent) from the end-December 2015 level of US$12.2 billion, as principal repayments exceeded disbursements.  The FCDU loan portfolio slightly contracted for the first quarter which may be attributed to attractive peso borrowing rates encouraging shift from foreign exchange (FX) to peso financing to avoid exposure to FX risk.  However, loans granted to exporters were up by US$310 million (11.4 percent) as stable macroeconomic fundamentals led to positive business sentiment and the strong
6.9 percent GDP growth during the first quarter of 2016. 

Loans to resident borrowers contracted from US$8.6 billion to US$8.4 billion (or by 2.3 percent) and represented 70.4 percent of total, with the following sectors/industries as major beneficiaries: public utility firms (US$1.2 billion or 10.0 percent of total loans), producers/manufacturers, including oil companies (US$0.7 billion or 5.8 percent of total),  merchandise and service exporters (US$3.0 billion or 25.2 percent of total), management/holding and stock brokerage (US$0.3 billion or 2.6 percent of total) and towing, tanker, trucking, forwarding, personal & other individuals (US$2.3 billion or 19.2 percent of total).  The US$0.9 billion balance (or 7.6 percent) of loans to residents went to other borrowers including government agencies/enterprises.

Gross disbursements during the reference quarter dropped by US$6.4 billion from US$15.8 billion to US$9.4 billion (or by 40.6 percent).  The bulk of loan releases (US$8.8 billion or 93.6 percent) had ST maturities.

The maturity profile of outstanding FCDU loans was as follows: medium- to long-term loans [or those payable over a term of more than one (1) year] represented 70.0 percent of total, while short-term (ST) accounts [or those with original maturities of up to one (1) year] comprised the 30.0 percent balance.

FCDU deposit liabilities, on the other hand, increased by US$2.2 billion or 6.8 percent from US$32.4 billion in December 2015 to US$34.7 billion in March 2016, with the bulk (97.2 percent) still held by residents, thereby essentially constituting additional buffer to the country’s gross international reserves.  The loans-to-deposit ratio decreased from 37.6 percent in December to 34.6 percent in the first quarter of 2016 as a consequence of the lower rate of expansion of loans (1.7 percent) and increase in deposits (6.8 percent). 

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