Filtered By: Money
Money

FCDU loans continue rise in December


Outstanding loans given by banks’ foreign currency deposit units (FCDU) rose slightly at the end of last year from the previous quarter as new borrowings exceeded repayments. Loan releases exceeded repayments by as much as $337 million, but these had been partially offset by the transfer and sale of some debts, the central bank said on Thursday. FCDU loans inched up by 3 percent or $147 million to $4.9 billion as of end-December from the end-September level. Year on year, however, FCDU loans decreased by 8.9 percent or $482 million following the sale of certain loans to an offshore investor. Dollar funds deposited with local banks are recorded under their foreign currency deposit units — special facilities that pay and charge dollar interest rates. In general, FCDU loans are more attractive to local corporate borrowers since the interest rates are linked to the yields of long-term US Treasury bonds or the short-term London Interbank Offered Rate. According to the central bank, almost two-thirds of the loans had medium- to long-term maturities — original payment terms of more than a year — and the balance had short-term tenors or payable within a year. "Residents have consistently dominated borrowings from FCDUs, accounting for about 69 percent of the total portfolio or $3.4 billion, which are mainly private sector borrowings," the Bangko Sentral ng Pilipinas (BSP) said. Of the new loans, about 84 percent had short-term maturities, reflecting a cautious attitude to longer-term exposure. The balance were medium- to long-term in nature. Meanwhile, FCDU deposit liabilities further expanded by 1.4 percent or $304 million to a record $22.6 billion at the end of last year from the end-September level. The bulk or 98 percent of these deposits were held by residents. The overall loan-to-deposit ratio improved to 21.5 percent from 21.1 percent a quarter ago, the BSP said. — N.P. Aquino, GMANews.TV

Tags: fcdu, fcdus
LOADING CONTENT