MANILA, Philippines - Loans extended by foreign currency deposit units (FCDUs) of banks went up 15.8% to $7.6 billion as of September from a year ago, the Bangko Sentral ng Pilipinas reported Friday.
The central bank owed the growth in loans to "improved business sentiment arising from positive developments in the economy."
However, the latest figure was 2.1% below the $7.8 billion recorded as of end-June this year.
"This development may be attributed to the low interest rate environment which has encouraged enterprises to obtain peso funding to reduce foreign exchange exposures, notwithstanding the strengthening of the peso," the BSP said.
An FCDU engages in foreign currency transactions such as accepting deposits or lending in foreign currency.
The BSP said resident borrowers, mainly from the private sector, accounted for 82.2% of the total FCDU loans.
The borrowings were used to fund public utility firms, merchandise and service exporters, producers and manufacturers including oil companies, and others, the central bank noted.