In a statement, the central bank said outstanding loans of banks’ foreign currency deposit units stood at $15.63 billion as of the end of June 2024, a decline of $438.58 million from $16.07 billion at the end of March 2024.
This drop in dollar loans coincided with a 4-percent depreciation of the Philippine peso against the US dollar during the same period, which likely contributed to decreased borrowing as foreign currency loans became more expensive for local borrowers.
The peso's weakening, combined with higher loan repayments, outpaced new disbursements, leading to a net repayment trend.
Gross disbursements for the quarter rose 3.9 percent to $19.9 billion, reflecting increased funding requirements from a foreign bank branch affiliate.
However, loan repayments surged 11.5 percent to $20.33 billion, further driving the overall decline in outstanding loans.
Despite the quarter-on-quarter drop, dollar loans increased by 1.6 percent year-on-year from $15.39 billion in June 2023. The majority of loans were extended to residents, particularly to sectors such as merchandise and service exporters, power generation companies, and the transport industry.