Banks’ outstanding FCDU loans inch up at end-2024

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US dollar banknotes are seen in this photo illustration taken Feb. 12, 2018. — REUTERS

OUTSTANDING LOANS granted by banks’ foreign currency deposit units (FCDU) inched up at end-2024, the Bangko Sentral ng Pilipinas (BSP) said on Monday.

Outstanding FCDU loans rose by 0.5% to $15.82 billion at end-December from $15.75 billion at end-September as disbursements exceeded principal repayments, the BSP said in a statement.

Year on year, loans granted by banks’ FCDUs climbed by 4.3% from $15.16 billion at end-2023.

FCDUs are BSP-approved bank units that perform transactions involving foreign currencies, including deposits and loans.

Gross loan disbursements declined by 54.9% to $9.81 billion in the fourth quarter of 2024 from $21.77 billion in the previous quarter, “primarily driven by a foreign bank branch’s adjustment in its funding strategy for its affiliate,” the central bank said.

Loan repayments also fell by 55.3% to $9.7 billion from $21.68 billion in the same comparable periods. These resulted in an overall net disbursement.

The majority or 77.1% of banks’ outstanding FCDU loans at end-December was made up of medium- to long-term debt, or those payable in more than a year, totaling $12.202 billion. This was up from $12.177 billion at end-September, which made up 77.6% of the period’s total.

By borrower type, outstanding FCDU loans granted to residents stood at $9.913 billion or 62.7% of the end-2024 total, up from $9.677 billion at end-September 2024 (61.5%).

“Majority went to the following sector/industries: merchandise and service exporters ($2.52 billion or 15.9%); towing, tanker, trucking, forwarding, personal and other industries ($2.24 billion or 14.1%); and power generation companies ($1.93 billion or 12.2%),” the BSP said.

FCDU loans to nonresidents stood at $5.91 billion, down from $6.07 billion the quarter prior.

Meanwhile, FCDU deposit liabilities went down by 3.5% to $55.46 billion as of end-2024 from $57.56 billion in the previous quarter.

Year on year, FCDU deposits inched up by 1.9% from $54.42 billion at end-December 2023.

“The bulk of these deposits ($54.14 billion or 97.6%) continued to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves,” the central bank said.

The overall FCDU loans-to-deposit ratio stood at 28.5% at end-2024, rising from 27.4% at end-September 2024 and 27.9% at end-2023. — A.M.C. Sy