Foreign currency deposit unit (FCDU) loans in the Philippines fell 5 percent to $15.13 billion in the third quarter of 2025 as repayments outpaced new disbursements, Bangko Sentral ng Pilipinas (BSP) data showed Monday.
FCDUs are units of local banks or branches of foreign banks authorized by the BSP to conduct transactions in foreign currencies, primarily to support importers and businesses with international exchange requirements.
The end-September balance represents an $802.09 million decline from the $15.93 billion recorded in the previous quarter. On a year-on-year basis, the loan portfolio dipped 3.9 percent.
The BSP said outstanding loans in the third quarter reflected $9.77 billion in new credit against $10.56 billion in principal payments. The decline occurred even as foreign currency deposits grew 5.7 percent to $60.73 billion from $57.46 billion a year ago.
Philippine-based borrowers accounted for $9.59 billion or 63.4 percent of the total outstanding debt, while the remainder was extended to non-residents. Among local borrowers, merchandise and service exporters held the largest share at $2.51 billion or 26.2 percent.
The transport and logistics sector, including towing, tanker, trucking and forwarding, accounted for $2.05 billion or 21.4 percent of local loans. Power generation companies held $1.71 billion or 17.8 percent of the domestic total.
Medium- to long-term loans with maturities exceeding one year made up 79.8 percent of the total portfolio, a slight increase from the 79-percent share reported in the second quarter.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the decline in FCDU loans reflected borrowers’ increased caution over risks of foreign exchange losses that come with foreign borrowings amid the peso’s depreciation against the US dollar.
He said the government also shifted to more domestic borrowings while reducing external borrowings in the past years, citing lessons learned from the mistakes on foreign exchange risks in past crisis periods “as a matter of prudence.”
