FCDU loans slip at end-September

By Kris Crismundo

December 29, 2022, 7:16 pm

MANILA – Foreign currency development unit (FCDU) loans in end-September this year slipped by 0.3 percent to USD15.67 billion from USD15.71 billion in end-June 2022, the central bank reported Thursday.

“The decrease in FCDU loans may be attributed to: gradual move in easing credit parameters and net tightening of overall credit standards of lender banks resulting in an unchanged or deliberate lending operations and credit activity amid uncertainty in the economic outlook; and borrowers’ reduced demand for FCDU loans in light of foreign exchange volatility and rising borrowing costs,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.

Compared to 2021, FCDU loans also shed by 1 percent or USD164 million from USD15.8 billion.

Most of the maturity profile of the FCDU loan portfolio were medium- to long-term debt, or those payable over a term of one year. This comprised 78.5 percent of the outstanding FCDU loans.

About 63.7 percent of the FCDU loans were granted to residents amounting to USD10 billion, of which USD2.7 billion went to power generation companies, USD2.4 billion to goods and services exports and USD1.2 billion to management/holding and stock brokerage.

“Gross disbursements in the third quarter of 2022 reached USD14.6 billion and were 6.6 percent lower than the previous quarter’s figure mainly due to decrease in funding requirements of a foreign bank branch affiliate. Similarly, loan repayments in the same quarter totaled USD14.6 billion, an 8 percent decrease from the previous quarter’s figure. These resulted in overall net disbursement,” BSP said.

Meanwhile, FCDU liabilities at end-September this year stood at USD45.8 billion, lower by USD838 million from end-June 2022.

“The bulk of these deposits (97.3 percent) continue to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves. Year-on-year, FCDU deposit liabilities decreased by USD102 million (or by 0.2 percent) from the end-September 2021 level of USD45.9 billion,” the central bank added. (PNA)