BSP: Foreign currency loans edged up in Q4 2024
Foreign currency-denominated loans issued by local banks saw a slight increase in the last quarter of 2024, as loan disbursements outpaced principal repayments.
Data from the Bangko Sentral ng Pilipinas (BSP) released on Monday showed that outstanding loans from foreign currency deposit units (FCDU) of banks rose by 0.5 percent to $15.82 billion, an increase of $72.43 million from $15.75 billion at the end of September 2024.
On an annual basis, FCDU loans rose 4.3 percent, increasing by $658.56 million from $15.16 billion in December 2023, which could indicate greater appetite for foreign currency for imports that can be used for local manufacturing or trading.
The country’s central bank said that the maturity profile of the foreign currency deposit unit loan portfolio remained largely medium- to long-term during the fourth quarter of 2024.
Loans granted to residents totaled $9.91 billion, making up 62.7 percent of total outstanding loans.
Exporters
The majority of these funds were allocated to key sectors, with $2.52 billion or 15.9 percent going to merchandise and service exporters, $2.24 billion or 14.1 percent to towing, tanker, trucking, forwarding, personal and other industries, and $1.93 billion or 12.2 percent to power generation companies.
Meanwhile, gross disbursements stood at $9.81 billion, lower by 54.9 percent than the previous quarter’s $21.77 billion, dragged down primarily by a foreign bank branch’s adjustment in its funding strategy for its affiliate.
Similarly, loan repayments for the quarter stood at $9.70 billion, marking a 55.3-percent decline from the $21.68 billion recorded in the previous quarter.
This led to an overall net disbursement, the BSP said.
Local residents
As for the country’s FCDU liabilities, it stood at $55.46 billion at the end of the three-month period, marking a $2 billion decline or 3.5 percent from $57.46 billion in September.
The BSP said the bulk of these deposits, amounting to $54.14 billion or 97.6 percent, remained with residents, providing an additional buffer for the country’s gross international reserves.
On an annual basis, FCDU deposit liabilities rose by $1.04 billion, or 1.9 percent, from $54.42 billion in December 2023.
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