FOREIGN currency loans disbursed by banks were lower as of September 2021, reflecting tighter credit standards and the availability of other sources for funding.

Data released by the Bangko Sentral ng Pilipinas (BSP) late Friday showed outstanding loans of foreign current deposit units (FCDUs) of banks dropped 2.1% to $15.8 billion as of September 2021 from $16.2 billion at end-June.

FCDUs are BSP-approved bank units that perform transactions involving foreign currencies, such as accepting deposits and handing out loans.

More than three-fourths (78.5%) of FCDU loans as of September 2021 have a tenor of more than one year.

During the period, 65% or $11.219 billion of the total FCDU loans were extended to Philippine residents. The remaining 35% or $6.047 billion went to non-residents.

By industries, exporters (14.8%) got the biggest chunk of the credit, followed by public utilities (6.7%), and producers/manufacturers including oil companies (5.1%).

BSP data showed that local banks disbursed 87.6% or $15.132 billion of the foreign currency loans, while $2.134 billion were from foreign bank branches and subsidiaries.

Meanwhile, FCDU deposit liabilities stood at $45.952 billion as of end-September, inching up by 0.5% from the $45.644 billion as of end-June.

The overall FCDU loans-to-deposits ratio increased to 37.6% as of end-September from the 35.4% seen at the end of the previous quarter.

Last week, the central bank eased the requirements for the foreign currency deposit system, allowing covered banks to only notify the BSP of their intention to engage in expanded/FCDU operations. Prior to this, banks were required to ask for the BSP’s approval to engage in such activities.

The BSP has also allowed Islamic banks and digital lenders to engage in FCDUs.

There were 76 banks with FCDU authority as of May 2021 — L.W.T. Noble

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