Outstanding bank loans denominated in foreign currencies significantly grew in the first quarter with the recovery of global demand, which allowed local exporters to secure more loans to support higher production.
Monetary officials said the banking sector’s growing liquidity increased the credit appetite of banks, and led to the rise in loans.
The Bangko Sentral ng Pilipinas on Friday reported that loans extended by the foreign currency deposit units (FCDUs) of banks amounted to $7.24 billion by the end of March this year, rising by 31 percent from the $5.53 billion registered in the same period last year.
The bulk of the amount, or $4.9 billion, was extended by universal and commercial banks, while thrift banks accounted for the balance.
The BSP said the enormous liquidity currently enjoyed by the banking sector enabled it to support the credit requirements of a growing economy.
The National Statistics Office earlier reported that, following a contraction in 2011, the country’s export revenue grew by 4.6 percent in the first quarter to $12.86 billion, from the $12.29 billion seen in the same period last year.
The growth in revenue was driven by the increase in global demand for electronics, the country’s major export product. The country exports intermediate electronics goods, which are then exported to foreign manufacturers for the production of consumer goods, such as computers and cellular phones.
However, the growth in exports in the first quarter was modest according to the government’s target. Economic managers expected exports to grow by at least 10 percent for the full year.
Most economists in the private sector consider the projection to be too optimistic. They said export revenues could only grow by a single-digit rate this year because of the slow pace of global economic recovery. Michelle V. Remo