Manila: Foreign currency-denominated loans granted by banks experienced a decline of 0.8 percent in the first quarter of the year. Data released by the Bangko Sentral ng Pilipinas (BSP) on Tuesday indicated that foreign currency deposit unit (FCDU) loans decreased to USD15.44 billion from USD15.56 billion in the previous quarter.

According to Philippines News Agency, on a year-on-year basis, FCDU loans also showed a reduction of 2.2 percent. FCDU loans are those extended by foreign currency deposit units of local banks or local branches of foreign banks authorized by the BSP to conduct foreign currency transactions. These loans play a crucial role in supporting economic activities that require foreign exchange, such as those involving importers, businesses, and individuals engaged in foreign currency dealings.

The data further revealed that 67.6 percent, or USD10.44 billion, of the total outstanding loans were extended to Philippine-based borrowers. The remainder of the loans was allocated to non-residents. The BSP identified the primary Philippine-based borrowers as merchandise and service exporters, firms engaged in activities like towing, tanker, trucking, forwarding, personal services, and other industries, as well as power generation companies.

The majority of the outstanding loans are medium- to long-term, with maturities extending beyond one year. As of the end of March 2026, the outstanding loans included USD8.25 billion in new loan releases and USD8.36 billion in loan repayments during the reference quarter.

In contrast, FCDU deposit liabilities saw an increase of 1 percent, rising to USD60.76 billion from USD59.82 billion in the fourth quarter of 2025.