FCDU lending down in Q4 2023

Outstanding loans granted by foreign currency deposit units (FCDU) of banks posted a decline in the last three months of 2023 as principal repayments surpassed disbursements made, amid elevated interest rates during the period.

Data released by the Bangko Sentral ng Pilipinas (BSP) showed that FCDU lending stood at $15.2 billion as of end-December 2023, reflecting a $340 million or 2.2% decrease from $15.5 billion the previous quarter.

This also reflected a $621 million or 3.9% decline from the $15.8 billion recorded at end-December 2022.

The FCDU maturity loan portfolio was predominantly medium/long term or those payable over more than a year term, which accounted for 78.6% of the total during the period.

Loans granted to residents were recorded at $9.2 billion or 60.6% of the total outstanding FCDU loans, with bulk going into power generation ($2.3 billion or 25%), merchandise and service exporters with $2.3 billion or 25.0%, and towing, tanker, trucking, forwarding, personal, and other industries with $1.2 billion or 12.8%.

Disbursements for the quarter hit $18.0 billion, marking a 5.4% increase from $17.1 billion in the previous quarter, attributable to the increase in funding requirements of a foreign bank branch affiliate.

Loan repayments, meanwhile, were recorded at $18.4 billion or 8.4% higher than the $17.0 billion in the previous quarter, resulting in an overall net repayment.

Liabilities stood at an all-time high of $54.4 billion, $2.6 billion or 5.1% higher than the $51.8 billion in the previous quarter, which the central bank attributed to the increase in FCDU time certificate of deposits owned by resident individuals.

Bulk of the deposits or $53 billion or 97.4% were owned by residents, which serve as an additional buffer to the country’s gross international reserves.

The Philippines ended 2023 with $102.5 billion in gross international reserves, which serves as a measure of the country’s ability to settle import payments and service foreign debt.—AOL, GMA Integrated News