FCDU loans climb to USD 15.93B in Q2 2025

By Francis Allan L. Angelo

Loans granted by foreign currency deposit units (FCDUs) of Philippine banks rose to USD 15.93 billion in the second quarter of 2025, reflecting a 0.9 percent increase from USD 15.78 billion in the previous quarter, according to data from the Bangko Sentral ng Pilipinas (BSP).

The growth in FCDU loans was primarily driven by credit extended to Philippine-based borrowers, which accounted for USD 10.12 billion or 63.5 percent of the total.

The largest local borrowers included merchandise and service exporters (USD 2.52 billion or 24.9 percent), the towing, tanker, trucking, forwarding, personal, and other industries (USD 2.22 billion or 22.0 percent), and power generation companies (USD 1.89 billion or 18.7 percent).

The rest of the outstanding loans — approximately USD 5.81 billion or 36.5 percent — were extended to non-residents.

Most FCDU loans remained medium- to long-term in nature, with 79.0 percent having maturities over one year, up from 77.2 percent in the first quarter of 2025.

The report also noted that during the April–June period, USD 6.76 billion in new FCDU loans were granted, while USD 6.64 billion in payments were received.

On a year-on-year basis, total outstanding FCDU loans rose by 1.9 percent from USD 15.63 billion in June 2024.

The increase in FCDU lending corresponded with a 10.0 percent year-on-year rise in foreign currency deposit liabilities, which reached USD 60.67 billion in June 2025, compared to USD 55.16 billion a year earlier.

The overall FCDU loans-to-deposits ratio declined slightly to 26.3 percent in the second quarter from 28.3 percent a year ago, suggesting improved liquidity positions among banks.

By type of creditor, local banks continued to dominate the market, accounting for the bulk of FCDU loans, followed by branches and subsidiaries of foreign banks.

Weighted average interest rates also declined, with short-term loans posting an average rate of 4.83 percent in Q2 2025, down from 5.52 percent in the same period last year.

FCDU loans are foreign currency-denominated loans extended by banks authorized by the BSP to engage in foreign exchange transactions.

These loans typically support foreign exchange-dependent sectors such as exporters, importers, and firms involved in international logistics, energy, and infrastructure.

The BSP noted that steady growth in foreign currency lending, coupled with a manageable maturity profile and stable interest rates, underscores confidence in cross-border financing and continued support for the country’s dollar-reliant industries.