Total deposits at foreign currency deposit units (FCDU) of banks in the Philippines reached an all-time high of $54.4 billion as of end-December 2023, up by 5.1 percent from the end-September 2023 level of $51.8 billion.
“This is mainly due to the surge in FCDU time certificate of deposits owned by resident individuals which aligns with the uptick in the remittances from overseas Filipinos,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.
The bulk of these deposits, or $53 billion representing 97.4 percent, belonged to Filipinos. They constituted an additional buffer to the country’s gross international reserves.
FCDU deposit liabilities also increased 13.7 percent from the end-December 2022 level of $47.8 billion.
Meanwhile, outstanding loans granted by FCDUs fell 2.2 percent to $15.2 billion in the fourth quarter of 2023 from $15.5 billion in the third quarter.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that principal repayments of US dollar-denominated loans exceeded disbursements amid the elevated interest rates for both short-term and medium-to long-term (MLT) loans.
Outstanding FCDU loans also decreased by 3.9 percent on a year-on-year basis from $15.8 billion in the fourth quarter of 2022.
The BSP said that as of end-December 2023, the maturity profile of the FCDU loan portfolio remained predominantly MLT or those payable over a term of more than a year. This comprised 78.6 percent of the total, slightly higher than 77.6 percent from the previous quarter.
FCDU loans granted to residents amounted to $9.2 billion or 60.6 percent of the total outstanding FCDU loans. Most of these loans went to the power generation companies ($2.3 billion); merchandise and service exporters ($2.3 billion); and towing, tanker, trucking, forwarding, personal and other industries ($1.2 billion)
Gross disbursements in the fourth quarter reached $18 billion, higher by 5.4 percent than the previous quarter’s $17.1 billion on increased funding requirements of a foreign bank branch affiliate.
Loan repayments in the fourth quarter hit $18.4 billion, also 8.4 percent higher than previous quarter’s $17 billion. These resulted in overall net repayment.