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Loans of Foreign Currency Deposit Units Grew by 1.3 percent in the First Quarter of 2020

07.31.2020

Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno announced today that as of end-March 2020, outstanding loans granted by Foreign Currency Deposit Units (FCDU) of banks stood at US$18.3 billion, higher by US$239 million (or by 1.3 percent) from the end-December 2019 level of US$18 billion as disbursements exceeded principal repayments. Year-on-year, FCDU loans increased by US$1.5 billion (or by 8.7 percent) from the end-March 2019 level of US$16.8 billion. The growth in loans may be attributed to borrowing firms’ higher working capital requirements, lower interest rates as well as increased investment in plant or equipment.

As of end-March 2020, the maturity profile of the FCDU loan portfolio remained predominantly medium- to long-term debt [or those payable over a term of more than one (1) year], which represented 79.5 percent of total, higher than the 75.8 percent level as of end-March 2019.

Of the total 64.8 percent outstanding loans to residents, 51.8 percent went to the following resident industries: power generation companies (18 percent); merchandise and service exporters (13.9 percent); public utility firms (7.8 percent); towing, tanker, trucking, forwarding, personal and other industries (6.9 percent); and producers/manufacturers, including oil companies (5.2 percent).

Gross disbursements in the first quarter of 2020 reached US$14.3 billion and were 7.8 percent higher than the previous quarter’s figure due to the increase in funding requirements of an affiliate of a branch of a foreign bank. Similarly, loan repayments were higher by 7.2 percent, thus, resulting in overall net disbursements.

FCDU deposit liabilities stood at US$43.1 billion as of end-March 2020, higher by US$2 billion (or by 4.9 percent) from the end-December 2019 level of US$41.1 billion. The bulk of these deposits (98 percent) continue to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves. Year-on-year, FCDU deposit liabilities increased by US$3.1 billion (or by7.8 percent) from the end-March 2019 level of US$40 billion.

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