June 11, 2019
AVAILMENTS of the Bangko Sentral ng Pilipinas’ (BSP) peso rediscount facility rose sharply in the first five months of 2019, data released on Monday showed.
Total loans surged to P85.799 billion, nine times more than the P8.917 billion borrowed in the same period a year ago.
The bulk of it — 64.51 percent — were classified as other credits by the central bank. The loans were used for capital asset expenditures (42.91 percent), loans to other services (16.32 percent), permanent working capital (5.22 percent) and housing loans (0.06 percent).
The rest — 35.48 percent — were classified as commercial credits, with loans for importation taking up 25.88 percent and trading of goods accounting for 9.6 percent.
Rediscounting is a privilege given by BSP to lenders qualified to obtain loans or advances using eligible borrowers’ papers as collateral.
Under the rediscount window, a bank wanting to liquidate outstanding client loans can run to the Bangko Sentral to swap these for cash at a discount.
Through the rediscounting facility, the central bank said it also made possible the timely delivery of credit to all productive sectors of the economy. Rediscounting is one of monetary tools it uses to regulate the level of liquidity in the financial system.
The BSP also said it had set rediscounted rates for June.
For loans under the peso rediscount facility, rates were pegged at 5.0625 percent per annum for loans with a maturity of one to 90 days and 5.1250 percent for loans with a maturity of 91 to 180 days.
Banks, meanwhile, did not tap the Exporters Dollar and Yen Rediscount Facility (EDYFR) for the period.
For May, EDYRF rates were set as follows: For 1-90 days maturity, 4.50250 percent per annum for the US dollar and 1.93933 percent for the yen; 91-180 days, 4.56500 percent for the dollar and 2.00183 percent for the yen; and 181-360 days, 4.62750 percent for the dollar and 2.06433 percent for the yen.
The rates “are based on the 90-day London Inter-Bank Offered Rate as of 31 May 2019, plus 200 basis points plus term premia,” the BSP said.
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