Q1 FCDU loans up 9%

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LOANS extended by banks’ foreign currency deposit units (FCDUs) rose 9.53 percent in the first quarter from a year earlier but fell as a proportion of deposits, data released by the Bangko Sentral ng Pilipinas (BSP) showed on Tuesday.

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FCDU loans during the quarter reached $12.46 billion, higher than the $11.38 billion recorded last year.

On a quarterly basis, FCDU loans rose 2.32 percent or by $282 million from $12.18 billion recorded at the end of December 2014.

“The expansion of the FCDU loan portfolio may be attributed to the prevailing low interest rate environment, stable financial system, and positive business sentiment arising from strong macroeconomic fundamentals leading to the lower-than-expected but still positive GDP [gross domestic product]growth of 5.2 percent for the first quarter of 2015,” the BSP said.

The loans-to-deposit ratio decreased to 38.4 percent at end-March from 41.5 percent in 2014, the BSP said. Compared to the previous quarter, the ratio inched up from 38.3 percent as a consequence of the lower expansion in deposits (2.2 percent) vis-à-vis the higher growth in loans (2.3 percent).

Deposit liabilities stood at $32.5 billion by end March, up by 18.38 percent from $27.45 billion in 2014.

The BSP said the loans mostly consisted of medium- to long-term loans—or those payable over a term of more than one year—representing 65.4 percent of total FCDU loans.

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

“Resident accounts continued to comprise the bulk of deposits at 97 percent,” the BSP said.

Resident borrowers represented 71.3 percent or $8.9 billion of the total FCDU loans extended during the quarter, while the remaining 23.6 percent or $2.9 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 other residents went to a power generation company, an investment firm, a holding company, and a realty developer company.

The balance of the loan portfolio went to non-residents, the central bank said.

It said gross disbursements during the period increased by 2 percent to $14.3 billion from the previous quarter’s $14 billion.

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