FCDU loans up 16% in Q4

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Loans extended by banks’ foreign currency deposit units (FCDUs) rose 16.54 percent in the fourth quarter of 2014 from a year earlier but dropped as a proportion of deposits, data released by the Bangko Sentral ng Pilipinas (BSP) showed on Tuesday.

FCDU loans during the quarter reached $12.18 billion, higher than the $10.45 billion last year “due to higher new loans granted during the year,” the BSP said, adding that the figures indicate investors’ optimism towards the Philippines’ low interest rate environment and vibrant economy.

On a quarterly basis, FCDU loans rose 0.8 percent or $99 million from $12.08 billion recorded at the end of September 2014.

The loans-to-deposit ratio decreased to 38.3 percent in 2014 from 40.3 percent in 2013 as a consequence of faster expansion in deposits than in loans, the BSP said.


Deposit liabilities stood at $31.8 billion by end 2014, up by 22.7 percent or $5.9 billion from $25.9 billion in 2013.

The BSP said the loans were mostly made up of medium- to long-term loans, or those payable over a term of more than one year, representing 63.1 percent of total FCDU loans.

Short-term accounts, or those with original maturities of up to one year, accounted for the 36.9 percent balance of the loan portfolio.

“Resident accounts continued to comprise the bulk of deposits at 97.1 percent [of total foreign currency deposits],” the BSP said.

“The expansion of the FCDU loan portfolio may be attributed to the continuing low interest rate environment, growth of the services and export sectors, and positive business sentiment arising from strong macroeconomic fundamentals, leading to the 6.9 percent GDP [gross domestic product]growth of the country for the fourth quarter of 2014,” the central bank said.

Resident borrowers represented 70.8 percent or $8.6 billion of the total FCDU loans extended during the quarter, while the remaining 26.2 percent or $3.2 billion went to other borrowers.

Loans to resident borrowers benefited public utility firms, producers/manufacturers, including oil companies, and merchandise and service exporters, the BSP said.

Loans to non-residents went to power generation companies, realty development firm, data solutions services provider, and a holding company.

Finally, the BSP said gross disbursements during the period increased by 3 percent to $14 billion from the previous quarter’s $13.6 billion.

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