Still no rediscount tap in 2 months, says BSP

MANILA, Philippines -  Banks have yet to tap the peso rediscount as well as exporter dollar and yen rediscount facilities of the Bangko Sentral ng Pilipinas (BSP) amid ample liquidity in the financial system. 

The central bank said there was no availment under the facilities in January and February this year. 

The rediscounting facility allows banks to borrow money from the BSP as long as these are backed by loan receivables. This ensures that banks have funds to lend to productive sectors in time of credit crunch.

 Over the past few years, the use of the central bank facility has been declining steadily as there is enough cash circulating in the economy. 

Last year, the amount of rediscount loans reached a record P10.76 billion amid higher credit demand particularly for infrastructure projects under the public private partnership (PPP) scheme. 

Data released by the BSP showed rediscount loans extended to local banks to finance the needs of businesses and households amounted to only P437 million in 2015. 

Out of the total amount disbursed last year, the central bank said bulk or 75.8 percent went to capital expenditures, permanent working capital and other service activities. 

On the other hand, a total 24 percent went to commercial credits while 0.2 percent went to production credits. 

For the month of March, the BSP  pegged the rates for the rediscounting windows I at 3.5625 percent for 90 days and 3.625 percent for 180 days as well as for the rediscount windows II at three percent for 90 days, 3.0625 for 180 days, and 3.125 percent for 360 days  

Last June 3, the central bank adopted the interest rate corridor (IRC) system, which resulted in the adjustment of key policy rates. 

The BSP’s Monetary Board on Thursday kept interest rates steady. The overnight lending rate was pegged at 3.5 percent, the overnight reverse repurchase at three percent, and the overnight deposit at 2.5 percent. 

US dollar-denominated loans under the EDYRF carry a rate of 3.064 percent for those maturing within 90 days, 3.1265 percent for those maturing within 180 days, and 3.189 percent for those maturing within 360 days. 

Loans denominated in yen carry a rate of 1.98957 percent for 90 days, 2.05207 percent for 180 days, and 2.11457 percent for 360 days.