PH banks feed firms’ growing appetites with more dollar loans
Dollar-denominated loans granted by banks rose to $17.8 billion, slightly higher by $338 million or 1.9 percent from the end-June 2019 level of $17.5 billion, as more loans were made than paid, according to the Bangko Sentral ng Pilipinas (BSP) on Friday (Dec. 27).
In a statement, the BSP said loans from banks’ foreign currency deposit units (FCDU) also increased by $1.7 billion or 10.8 percent from its level of $16.1 billion in September 2018.
BSP Governor Benjamin Diokno, in the statement, said the growth in loans could be due to the higher working capital requirements of borrowing companies.
As of end-September 2019, the maturity profile of the FCDU loan portfolio remained predominantly medium- to long-term [or those payable over a term of more than one (1) year], which represented 77.5 percent of total, higher than the 76.7 percent level as of end-September 2018.
The bulk of outstanding loans went to the following domestic industries: towing, tanker, trucking, forwarding, personal and other industries (23.7 percent); merchandise and service exporters (15.3 percent); public utility firms (8.3 percent); and producers/manufacturers, including oil companies (4.9 percent).
Gross disbursements in the third quarter of 2019 reached $17.3 billion and were 3.7 percent higher than the previous quarter’s figure due to increase in funding requirements of an affiliate of a branch of a foreign bank. Similarly, loan repayments were higher by 5.7 percent, resulting in overall net disbursements.
FCDU deposit liabilities stood at $41.1 billion as of end-September 2019, slightly lower by $212 billion (0.5 percent) from the end-June 2019 level of $41.3 billion, with the bulk (96.9 percent) continuing to be held by residents.
“These essentially constitute an additional buffer to the country’s gross international reserves,” the central bank said.
Year-on-year, FCDU deposit liabilities increased by $2.4 billion or by 6.1 percent from the end-September 2018 level of $38.8 billion.
