FOREIGN CURRENCY loans disbursed by local banks inched up in the last quarter of 2019 on the back of borrowing firms’ higher working capital requirements.

Outstanding loans by foreign currency deposit units (FCDU) of banks inched up to $18 billion as of end-December 2019, up by 1.2% from the end-June 2019 level of $17.8 billion, according to data from the Bangko Sentral ng Pilipinas (BSP).

FCDU loans also climbed by 8.7% year-on-year from the $16.1 billion logged at end-December 2018.

“The growth in loans may be attributed to borrowing firms’ higher working capital requirements,” the central bank said on Tuesday.

FCDUs are central bank-approved bank units which performs transactions involving foreign currencies, mainly by accepting deposits and handing out loans.

According to BSP data, the biggest chunk of outstanding loans went to power generation companies (17.8%); merchandise and service exporters (14%); public utility firms (8.1%); towing, tanker, trucking, forwarding, personal and other industries (5.9%); and producers/manufacturers, including oil companies (5.2%).

Gross credit disbursed during the October to December period dropped 23.5% to $13.5 billion due to a decrease in funding requirements of a foreign bank unit.

Likewise, loan repayments went down 22.9% which resulted in overall net disbursements.

BSP data showed that FCDU deposit liabilities stood at $41.1 billion as of end-December 2019, unchanged from its third- quarter level.