Loans extended by banks’ foreign currency deposit units (FCDUs) rose 20.6 percent to $10.5 billion in 2013 from $8.7 billion in the previous year as the country’s strong macroeconomic fundamentals encouraged investors and fueled vibrant business activity.
Data released by the Bangko Sentral ng Pilipinas (BSP) over the weekend showed that FCDU loans last year expanded by $1.8 billion from the year-earlier level of $8.7 billion. On a quarterly basis, FCDU loans rose 5 percent or $493 million from $10 billion recorded at the end of September 2013.
FCDU are foreign currency-denominated loans granted by commercial banks and thrift banks operating in the Philippines to various sectors of the economy.
“An uptrend was consistently noted during the four quarters of the year which may be attributed to more vibrant business activities arising from the overall positive sentiment due to strong macroeconomic fundamentals,” the central bank said.
Transactions for the year resulted in an overall net disbursement of $1.8 billion, as total disbursements reached $36.3 billion from the $17.1 billion recorded a year ago, while loan repayments grew from $15.8 billion to $34.5 billion.
The BSP said these loans were made up mostly of medium- to long-term loans, or those payable over a term of more than one year, and represented 62.4 percent of the total, reflecting banks’ confidence to lend longer-term funds. Short-term accounts, or those with original maturities of up to one year, comprised the balance of the loan portfolio.
Resident borrowers represented 79.5 percent or $8.3 billion of the total FCDU loans extended, benefiting public utility firms (19.5 percent), producers/manufacturers, including oil companies (16.1 percent), and merchandise and service exporters (14.9 percent), while the 29.1 percent balance went to other residents including government agencies and enterprises.
Deposit liabilities stood at $25.9 billion by end 2013, down by 1.0 percent from $26.2 billion in September 2013. The central bank said resident accounts comprised the bulk of deposits at 97.5 percent.