Prospectively higher US interest rates and a deliberate choice by local fund managers to borrow more from local sources than from abroad showed clearly in the third-quarter data on foreign-currency deposit unit (FCDU) loans as reported by the Bangko Sentral ng Pilipinas (BSP).
Data show the outstanding loans granted by so-called FCDUs aggregated $11.8 billion during the period. This was 3.1 percent, or $375 million, lower than FCDU loans totaling
$12.1 billion a quarter earlier.
The BSP said dollar-loan repayments exceeded disbursements during the period. It also said some borrowers shifted to domestic financing, as peso loans posted growth of 5 percent to P4.6 trillion for the period.
The bulk of the loans, or 70.5 percent, of aggregate were medium to long term. This, according to the BSP, indicated the banks’ confidence to lend for the long haul rather than just for one year.
Short-term FCDU loans worth only $3.47 billion accounted for only 29.5 percent of the total FDCU loan portfolio. The balance of $8.29 billion were medium- to long-term dollar loans.
The bulk, or 70.8 percent, of total outstanding FCDU loans equal to $8.33 billion were extended to domestic borrowers.
The loans benefited the large public-utility firms, producers/manufacturers, including oil
companies, merchandise and service exporters, management/holding and stock brokerage and towing, tanker, trucking, forwarding, personal and
other individuals.
The balance of $3.43 billion were taken out by nonresident borrowers.
Dollar-rich loan banks provided the bulk of FCDU loans and collectively extended a total of $9.63 billion for the period.
Foreign-owned banks extended FCDU loans totaling only $1.92 billion.
The country’s FCDU units reported aggregate deposits totaling $32.21 billion for the period, just 4.4 percent higher than deposits a quarter
earlier.