Banks’ forex loans up in first half

Banks’ outstanding loans denominated in foreign currencies grew in the first half of the year due to the rise in economic activities, which led to greater demand for credit.

The Bangko Sentral ng Pilipinas said growth in the amount of loans indicated that the banking sector has sufficient resources to meet any increase in borrowings.

Loans extended by banks’ foreign currency deposit units (FCDUs) reached $7.77 billion as of end-June, up by 23 percent from the $6.31 billion registered in the same period last year, data from the BSP showed. The amount of FCDU loans was also up by 7.3 percent from the $7.24 billion reported at the end of March this year.

Data further showed that borrowers from the private sector accounted for bulk, or $6.46 billion, of total outstanding FCDU loans.

Borrowers included oil companies and other import-oriented firms that use foreign currencies to pay for their purchases. Export companies that import raw materials also tap banks for their foreign exchange requirements.

In the first half of the year, the economy, measured in terms of gross domestic product, grew by 6.1 percent from a year ago. This was one of the faster growth rates in Asia during the period.  Michelle V. Remo