Banks’ foreign currency loans climb to $15.6 billion at end-2025

OUTSTANDING LOANS granted by banks’ foreign currency deposit units (FCDU) at end-2025 slipped year on year but edged up from the previous quarter, the Bangko Sentral ng Pilipinas (BSP) said late on Tuesday.

Central bank data showed that loans disbursed by banks’ FCDUs reached $15.561 billion as of December, down 1.64% from the $15.82 billion seen a year prior.

However, this climbed by 2.9% from $15.126 billion at end-September.

FCDUs are units of local banks or local branches of foreign banks authorized by the BSP to service transactions involving foreign currencies, including deposits and loans.

Resident and nonresident borrowers, including individuals and businesses like importers, use these loans for their foreign currency payables or needs.

The end-December tally reflected $8.32 billion in new loans disbursed and $7.87 billion in loan payments made in the fourth quarter.

According to the BSP, $10.391 billion or 66.8% of the total amount was lent to local borrowers from the private sector.

Broken down, 25.6% were extended to merchandise and service exporters; 24.1% to towing, tanker, trucking, forwarding, personal, and other industries; and 16.7% to power generation companies.

The rest or 33.2% of banks’ outstanding FCDU loans valued at $5.17 billion were extended to nonresidents.

In terms of maturity profile, $12.318 billion of the loans were medium- to long-term debt, or those payable in a year or more. This accounted for 79.2% of the total, slightly lower than the previous quarter’s 79.8% share but above the 77.1% at end-December 2024.

Meanwhile, $3.243 billion or 20.8% were short-term debt, exceeding the prior quarter’s $3.057 billion (20.2%) but below the prior year’s $3.618 billion (22.9%).

By creditor type, domestic banks granted the most loans during the period at $12.92 billion or 83% of the total. Commercial banks lent out $12.897 billion, while $23 million came from thrift banks.

Foreign currency loans extended by foreign banks stood at $2.641 billion at end-December, making up 17% of the total.

Preliminary BSP data also showed that banks’ FCDU deposit liabilities increased by 7.88% year on year to $59.828 billion at end-December from $55.46 billion in 2024. However, this was 1.49% lower than the $60.732 billion at end-September.

This brought the FCDU loans-to-deposits ratio to 26%, down from 28.5% the previous year but up from 24.9% at end-September. — Katherine K. Chan