The demand for dollar-denominated credit rose in the third quarter of 2016, mirroring the hike in foreign-currency deposits during the July-to-September period, the Bangko Sentral ng Pilipinas (BSP) reported.
Latest data from the central bank show the outstanding loans granted by the banks’ foreign-currency deposit units, or FCDUs, stood at $12.4 billion as end-September 2016. This was 3.2 percent, or $381 million, higher than a quarter earlier.
Loans released during the period were for predominantly Philippine residents amounting to $8.48 billion, representing 68.2 percent of the total loan portfolio.
The BSP said the major beneficiaries of the loans were the merchandise and service exporters; towing, tanker, trucking, forwarding, public-utility firms; producers or manufacturers, including oil companies; and management or holding and stock brokerage.
The $500-million balance went to other borrowers, including the public sector.
Also, most FCDU loans, or 69.7 percent were to mature over the medium to long-term. These loans are payable over a term of more than one year.
Short-term credit, meanwhile, comprised 30.3 percent of the total FDCU loan portfolio. The BSP earlier said this type of credit mirror the banks’ confidence to lend long-term funds.
Meanwhile, FCDU deposit liabilities increased slightly from $34.7 billion in the second quarter to $34.9 billion.
The bulk of deposits, or 97.2 percent of the total, continued to be held by residents.
The BSP welcomed this development. The still expanding FCDU deposits are an additional shield against external shocks, secondary to the country’s gross international reserves.