Foreign-currency loans in the Philippines slipped in Q1

MANILA, Philippines – Foreign currency loans granted by banks edged lower in the first quarter, a decline that came before the outbreak of conflict in the Middle East roiled markets and weakened the peso.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed that outstanding loans handed out by foreign currency deposit units (FCDU) of banks had amounted to $15.44 billion in the three months ending in March, down 0.8 percent from the preceding quarter.

READ: PH foreign debt dipped in Q1 to $147.35B

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On an annual basis, FCDU loans fell by 2 percent.

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FCDUs are units of local banks and Philippine branches of foreign banks authorized to accept foreign currency deposits and extend dollar- and other foreign currency-denominated loans.

Such lending is typically used to finance imports and other transactions that require foreign exchange.

Philippine-based borrowers accounted for $10.44 billion, or 67.6 percent, of the total outstanding loans in the first quarter. The remainder went to nonresidents.

READ: Bank loans grow faster despite Middle East shock

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Among domestic borrowers, merchandise and service exporters received the largest share at $2.75 billion, or 26.4 percent of the total.

This was followed by transportation and logistics companies—including towing, tanker, trucking and forwarding firms as well as other service industries—with $2.51 billion or 24 percent of total.

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Power generation companies borrowed $1.85 billion, accounting for 17.7 percent.

More than three-fourths of the loans, or 77.1 percent, had maturities of more than one year, down from 79.2 percent in the previous quarter. INQ

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