Banks’ FCDU loans rise in Q3

FOREIGN CURRENCY loans disbursed by local banks inched up in the third quarter backed by borrowing firms’ higher working capital requirements paired with lower interest rates.

Outstanding loans by foreign currency deposit units (FCDU) of banks stretched to $17.8 billion as of end-September, up by 1.9% from the end-June level of $17.5 billion, according to data from the Bangko Sentral ng Pilipinas (BSP).

Year-on-year, the FCDU loans of lenders jumped 10.8% from $16.1 billion.

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

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

Data released by the BSP showed that the biggest chunk of outstanding loans went to towing, tanker, trucking, forwarding, personal and other industries (23.7%), followed by merchandise and service exporters (15.3%); public utility firms (8.3%); and producers/manufacturers, including oil companies (4.9%).

Gross credit disbursed in the third quarter of the year amounted to $17.3 billion, up 3.7% quarter-on-quarter. Loan disbursement growth was boosted by the increase in funding requirements of an affiliate of a branch of a foreign bank, the BSP said.

Loan repayments also grew 5.7% which resulted in overall net disbursements.

Central bank data showed that overall loans-to-deposits ratio inched up to 43.3%, higher than both the 42.3% seen as of the second quarter and the 41.5% recorded a year ago. — L.W.T. Noble