FCDU lending decreases slightly in second quarter
Outstanding loans granted by Foreign Currency Deposit Units (FCDU) of banks stood at $15.7 billion as of end-June, recording a decrease of $255 million (or by 1.6 percent) from the end-March level of $16 billion as principal repayments exceeded disbursements.
Outstanding FCDU loans recorded another decline during the second quarter of 2022 following an increase in the first quarter of 2022 since the onset of the pandemic.
The decrease in FCDU loans may be attributed to: (a) net tightening of overall credit standards of lender banks as a result of uncertainty in the economic outlook; and (b) borrowers’ reduced demand for FCDU loans in light of foreign exchange volatility and rising borrowing costs.
Year-on-year, outstanding FCDU loans decreased by $457 million (or by 2.8 percent) from the end-June 2021 level of $16.2 billion.
As of end-June, the maturity profile of the FCDU loan portfolio remained predominantly medium- to long-term debt (or those payable over a term of more than one year), which comprised 79.1 percent of total, similar to the previous quarter.
Of the $10.1 billion outstanding loans to residents, 63.3 percent went to the following sector/industries: power generation companies ($2.8 billion or 27.7 percent); merchandise and service exporters ($2.3 billion or 22.7 percent); and management/holding and stock brokerage ($1.3 billion or 12.9 percent).
Gross disbursements in the second quarter reached $15.7 billion and were 7.0 percent higher than the previous quarter’s figure mainly due to increase in funding requirements of a foreign bank branch affiliate.
Similarly, loan repayments in the second quarter totaled $15.9 billion, a 10.4 percent increase from the previous quarter’s figure. These resulted in overall net repayments.
FCDU deposit liabilities stood at $46.6 billion as of end-June, higher by $306 million (or by 0.7 percent) from the end-March level of $46.3 billion.
The bulk of these deposits (96.9 percent) continue to be owned by residents, essentially constituting an additional buffer to the country’s gross international reserves.
Year-on-year, FCDU deposit liabilities increased by $968 million (or by 2.1 percent) from the end-June 2021 level of $45.6 billion. BSP
