LOANS extended by banks’ foreign currency deposit units (FCDUs) slipped by five percent in the third quarter of 2025, a slowdown an economist attributed to growing risk aversion among borrowers.
Data released by the Bangko Sentral ng Pilipinas (BSP) on Monday, Dec. 29, showed that FCDU loans totaled US$13.13 billion from July to September, down from $15.93 billion in the previous quarter.
Around 63.4 percent of the funds were extended to Philippine borrowers at $9.59 billion, while the remaining was extended to non-residents.
Of the funds extended to local borrowers, 26.2 percent or $2.51 billion went to merchandise and service exporters, 21.4 percent or about $2.05 billion to towing, tanker, trucking, forwarding, personal and other industries, and 17.8 percent or $1.71 billion to power generation firms.
The BSP said nearly 79.8 percent of the loans were medium- to long-term, with maturities exceeding one year.
“As of end-September 2025, outstanding loans reflected $9.77 billion in new loans and $10.56 billion in loan payments made during the reference quarter,” it said.
As of end-September this year, FCDU loans fell 3.9 percent “despite the 5.7 percent growth in deposits in foreign currencies, which reached $60.73 billion from $57.46 billion,” the central bank report added.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the decline reflects borrowers’ efforts to avoid foreign exchange risks tied to dollar-denominated loans.
“Even the government reduced foreign/external borrowings and more local/domestic borrowings in recent years,” he said, adding: “learning from the mistakes on forex risks in past crisis periods.” / PNA