Foreign currency deposits held by banks in the Philippines reached an all-time high of $58.6 billion as of end-March 2024, according to the Bangko Sentral ng Pilipinas (BSP).
This represented an increase of about $4.2 billion, or 7.7 percent, from the $54.4 billion recorded at end -December 2023.
FCDU refers to a unit of a local bank or branch of a foreign bank authorized by the BSP to engage in foreign currency-denominated transactions.
“The increase is mainly due to a rise in FCDU time certificates of deposit owned by private corporations and resident individuals, which aligns with the uptick in remittances from overseas Filipinos,” the BSP said.
The bulk of these deposits, $57.4 billion or 97.9 percent, were owned by residents, essentially constituting an additional buffer to the country’s gross international reserves.
FCDU deposits also increased by $9.9 billion, or 20.3 percent, from the $48.7 billion recorded at the end of March 2023.
Outstanding loans granted by FCDUs rose to $16.1 billion as of March 31, 2024, from $15.2 billion at the end of December 2023, an increase of $911 million, or 6.0 percent. This was due to disbursements exceeding principal repayments.
The BSP said that on a year-on-year basis, outstanding FCDU loans went up by $614 million, or 4.0 percent, from the $15.5 billion recorded at the end of March 2023.
The maturity profile of the FCDU loan portfolio remained predominantly medium- to long-term, with those payable over a term of more than one year comprising 79.1 percent of the total. This is slightly higher than the 78.6 percent recorded in the previous quarter.
FCDU loans granted to residents stood at $9.7 billion, or 60.6 percent of the total outstanding. The majority of these loans went to the following sectors: merchandise and service exporters ($2.4 billion or 24.4 percent); power generation companies ($2.2 billion or 22.4 percent); and towing, tanker, trucking, forwarding, personal and other industries ($1.7 billion 17.8 percent)
Gross disbursements in the first quarter of 2024 reached $19.2 billion, higher by 6.4 percent than the previous quarter’s $18.0 billion. This was mainly due to the increased funding requirements of a foreign bank branch affiliate.
Loan repayments in the first quarter amounted to $18.2 billion, down 0.8 percent from the previous quarter’s $18.4 billion.