Metro Manila (CNN Philippines) — Foreign currency deposit unit-loans (FCDU) rose by 2.3% during the first three months of the year compared to the 2014’s year-end level, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco announced Tuesday (June 30).
FCDUs, the BSP explained, are units of a local bank or a local branch of a foreign bank that have been authorized by the BSP to engage in foreign-currency denominated transactions.
FCDU loans stood at $12.5 billion last quarter, up by $282 million from end-December 2014’s $12.2 billion, as disbursements exceeded repayments.
The BSP attributed the loan portfolio’s growth to a prevailing low interest rate environment, stable financial system, and positive business sentiment “arising from strong macroeconomic fundamentals” that lead to to a positive, albeit lower than expected, Q1 2015 gross domestic product growth of 5.2%.
Medium to long-term loans — those payable over a term of more than one year — accounted for 65.4% maturity profile. Short term loans took up the remaining share.
About 71.3% of the outstanding loan share went to Philippine residents, with public utility firms, producers/manufacturers (including oil companies), and merchandise and service exporters as the respective top three beneficiaries.
Local commercial banks were the largest source of FCDU loans. They accounted for 80.8% of the creditor share.
