Bank loans denominated in US dollar and other foreign currencies rose in the third quarter, as the growing liquidity in the banking sector encouraged industry players to lend more.
Data from the Bangko Sentral ng Pilipinas showed that the outstanding foreign currency-denominated loans extended by the banking system as of the end of September hit $7.6 billion, up by 15 percent from $6.6 billion in the same period last year.
The September 2012 figure, however, was down by 2 percent from $7.8 billion as of the end of June.
BSP data further showed that borrowers from the private sector accounted for 82 percent of the total outstanding FCDU loans as of September. Government entities accounted for the rest.
Moreover, local banks lent out the bigger share of 68 percent, while foreign banks accounted for the balance.
The BSP said the rise in the loans extended by the foreign currency deposit units (FDCUs) of banks indicated that the growing liquidity of the banking industry was benefiting the borrowing public.
Loans in foreign currencies are usually secured by importers. Exporters who import raw materials also tap loans from FCDUs to meet their foreign exchange requirements. The rise in FCDU loans is, thus, associated with increasing importation.
Earlier, the National Statistics Office reported that the country’s importation in the first 10 months of the year reached $51.27 billion, slightly higher than the $50.84 billion registered in the same period last year.
Regulators said the rise in foreign currency-denominated loans supported observations of growing economic activities.
In the first three quarters, the economy, measured in terms of gross domestic product, grew by 6.5 percent from a year ago. This made the Philippines one of the fastest growing Asian economies during the period.
BSP officials said credit growth, which supports consumption and investments, partly aided the economy’s robust expansion in the first three quarters, which was attained despite global economic problems that dampened export earnings of many emerging Asian countries.
They said the country’s banking sector, given its rising resources, was expected to continue helping fuel economic growth in 2013.
The BSP said banks were enjoying growing resources, due largely to rising deposits from individual depositors and enterprises.