FCDU lending declines further in Q4 2020

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno announced today that as of end-December 2020, outstanding loans granted by Foreign Currency Deposit Units (FCDU) of banks stood at US$16.7 billion, lower by US$614 million (or by 3.6 percent) from the end-September 2020 level of US$17.3 billion as principal repayments exceeded disbursements.

Year-on-year, outstanding FCDU loans decreased by US$1.4 billion (or by 7.7 percent) from the end-December 2019 level of US$18.0 billion. The decline in FCDU loans may have resulted from tightened credit standards as well as lower working capital requirements due to the economic slowdown.

As of end-December 2020, the maturity profile of the FCDU loan portfolio remained predominantly medium- to long-term debt [or those payable over a term of more than one (1) year], which represented 80.0 percent of total, slightly higher than the 79.0 percent level as of end-December 2019.

Of the total 67.0 percent outstanding loans to residents, 40.0 percent went to the following resident industries: power generation companies (17.9 percent); merchandise and service exporters (14.2 percent); and public utility firms (7.9 percent).

Gross disbursements in the fourth quarter of 2020 reached US$13.9 billion and were 13.9 percent higher than the previous quarter’s figure due to the increase in funding requirements of an affiliate of a branch of a foreign bank.

Similarly, loan repayments were higher by 12.4 percent, thus, resulting in overall net repayments.

FCDU deposit liabilities stood at US$45.1 billion as of end-December 2020, lower by US$890 million (or by 1.9 percent) from the end-September 2020 level of US$46.0 billion. The bulk of these deposits (97.5 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 increased by US$4.0 billion (or by 9.7 percent) from the end-December 2019 level of US$41.1 billion.