PH banks continue granting dollar loans as firms’ appetites grow

Outstanding dollar loans granted by banks rose to $17.8 billion in the third quarter, higher by $338 million, or 1.9 percent, than the end-June 2019 level of $17.5 billion, as disbursements exceeded principal repayments, the central bank said on Friday. In a statement, the Bangko Sentral ng Pilipinas (BSP) said loans by banks’ foreign currency deposit units (FCDU) also increased by $1.7 billion, or 10.8 percent, from the end-September 2018 level of $16.1 billion.

“The growth in loans may be attributed to borrowing firms’ higher working capital requirements,” BSP Governor Benjamin Diokno said.

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 resident 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 or branch of a foreign bank. Similarly, loan repayments were higher by 5.7 percent, thus, resulting in overall net disbursements.

FCDU deposit liabilities stood at $41.1 billion as of end-September 2019, lower by $212 billion (0.5 percent) than the end-June 2019 level of $41.3 billion, with the bulk (96.9 percent) 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. —DAXIM L. LUCAS