BANKS SECURED additional loans from the central bank’s rediscount window in June to support capital expenses and commercial lending despite rising borrowing costs.
Total availments amounted to P9.776 billion for the first semester, surging from the mere P15 million in loans secured during the comparable period in 2017, the Bangko Sentral ng Pilipinas (BSP) reported yesterday. The amount rose from the P8.917 billion in credit secured as of May.
Through the rediscount window, the BSP lets banks get hold of additional money supply by posting their collectibles from clients as collateral. In turn, the banks may use the fresh cash — expressed in the peso, dollar or yen — to grant more loans for corporate or retail clients and service unexpected withdrawals.
Nearly half of the loans were secured to finance bigger commercial credits, which took a 47.57% share of the total. Lending for capital asset spending also took a 40.29% share, the BSP said.
The remainder of the loans went to fund services (7.15 %), permanent working capital (4.92%), housing (0.05%) and production (0.02%), the BSP said in a statement.
Banks continued to avail of rediscount loans even as margins climbed to mirror higher benchmark interest rates.
Since June 25, loans maturing in 90 days or lower are charged a 4.0625% rate while 180-day credit lines now carry a 4.125% spread. The rediscount rates are computed based on the BSP’s overnight lending rate — which is now at four percent — plus term premia.
These changes reflect a second 25-basis-point hike in key rates announced on June 20, which follows a hike of similar magnitude introduced during the Monetary Board’s May 10 meeting.
On the other hand, both the dollar and yen loan facilities stood untapped as of June, recording no availments since the previous year.
For July, rates for the dollar-denominated credit lines climbed from last month. Margins for dollar loans stand at 4.33575% for 90-day loans; 4.39825% for 91- to 180-day loans; and 4.46075% for 181- to 360-day loans, the BSP said yesterday.
Meanwhile, yields imposed on yen borrowings slid to 1.955% for one to 90-day loans, 2.0175% for 91- to 180-day loans, and 2.080% for 181- to 360-day loans for this month. — Melissa Luz T. Lopez