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FCDU Loan Portfolio Up by 0.9 Percent in Fourth Quarter of 2003

04.29.2004

Bangko Sentral Officer-In-Charge Alberto V. Reyes announced today that, as of December 31, 2003, outstanding loans granted by Foreign Currency Deposit Units (FCDUs) of commercial and thrift banks amounted to US$4,883 million. The figure reflected an increase of US$43 million or 0.9 percent from the end-September level of US$4,840 million. 

The growth in FCDU loans resulted from net loan releases of US$58 million and upward foreign exchange revaluation adjustment of US$25 million, which were only partly offset by the downward adjustment of US$40 million due to rebooking of accounts and audit findings. The revaluation adjustment was brought about by the weakening of the US Dollar against major currencies which raised the dollar equivalent of FCDU loans denominated in currencies like the Yen while the rebooking adjustment pertained largely to the rebooking of certain banks’ exposures to BSP from “Loans and Discounts” to “Investment in Bonds and Other Debt Instruments - Foreign” (IBODI).

 Meanwhile, FCDU deposit liabilities expanded by US$163 million or by 1 percent to US$13,421 million during the same period. About 95 percent of the outstanding deposits were owed to residents. The overall loans-to-deposits ratio remained essentially unchanged at 37 percent by the close of 2003.

Private sector accounts represented the bulk (65 percent) of total portfolio. The largest borrowers were the government financial institutions (25 percent), exporters (24 percent) and public utility firms (19 percent). In terms of maturity, medium and long-term loans (or those with payment terms of more than 1 year) comprised 72 percent of total.

The top five lenders have remained the same since 2001. These consist of four local commercial banks and one foreign bank branch whose combined exposures accounted for 45 percent of the entire FCDU portfolio.

Loan releases during the quarter aggregated US$988 million, up by more than 8 percent from the previous period’s figure, with weighted average interest rate at 3.51 percent. About 64 percent of these disbursements came from local commercial banks, and the balance from foreign bank branches/subsidiaries operating in the country.

On an annual basis, outstanding FCDU loans registered a 6 percent decline from last year’s US$5,200 million level, while peso loans expanded by 5 percent during the same period, reflecting borrowers’ avoidance of further foreign exchange exposures. In contrast, FCDU investments in securities posted an overall increase of US$1,941 million or 31 percent during the year. “Investments in Bonds and Other Debt Instruments – Foreign” and “Available for Sale Securities – Foreign” rose by US$1,476 million and US$618 million, respectively, while “Trading Account Securities – Investments” dropped by US$153 million.

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