Loans sought by banks through the peso rediscount facility of the Bangko Sentral ng Pilipinas (BSP) were steady at P26.9 billion in the first 10 months of the year.
Data from the central bank on Tuesday showed that availments from January to October were unchanged from the availments in the first nine months of 2020.
Meanwhile, the availments declined by 77.98 percent from the P122.167 billion borrowed in the same 10-month period in 2019.
The BSP classified the bulk — 81.94 percent — as other credits. These loans were used for
capital asset expenditures (71.26 percent), permanent working capital (10.67 percent), and housing (0.01 percent).
The rest — 18.06 percent — were classified as commercial credits, with loans for importation taking up 10.93 percent and trading of goods at 7.13 percent.
Rediscounting is a Bangko Sentral credit facility extended to qualified banks with active rediscounting lines to meet their temporary liquidity needs by refinancing the loans they extend to their clients using the eligible papers of its end-user borrowers.
Under the rediscount window, a bank wanting to liquidate outstanding client loans can run to the central bank 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 central bank has deployed temporary relief measures in its rediscounting facilities, which are in place until end-January next year.
“The measures aim to ensure availability of credit to productive economic sectors by lowering effective lending rates. These also encourage banks to lend to businesses to help them recover from the Covid-19 (coronavirus disease 2019) crisis,” BSP Governor Benjamin Diokno has said.
The applicable BSP rediscount rates for loans under the peso rediscountfacility is still at 2.75 percent, regardless of loan maturity, while rediscount rates for loans under the exporters’ dollar and yen rediscount facility until January 31, 2021 have been set at 2.21575 percent for the US dollar and 1.89733 percent for the Japanese yen, regardless of loan maturity.