Rediscount window untapped in Feb.
BANKS left the central bank’s rediscount facility untouched in February as loan demand remains relatively slow amid the crisis.
There were no availments for the Peso Rediscount Facility as well as the Exporters’ Dollar and Yen Rediscount Facility in February year to date, the Bangko Sentral ng Pilipinas (BSP) said in a statement on Monday.
Last year, banks only tapped the rediscount window in June, July and September. These peso rediscount loans amounted to P6.12 million.
Rediscount loans in 2021 were significantly smaller than the P26.9 billion in 2020.
Through the BSP’s rediscount facility, banks can access additional money supply by posting their collectibles from clients as collateral.
Lenders may use the cash denominated in peso, dollar or yen denominations to extend credit to corporate or retail clients and service unexpected withdrawals.
Lenders did not touch the rediscount facility in February due to still relatively muted loan demand amid the pandemic, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Metro Manila and some provinces were under Alert Level 3 in January. In February, these areas were placed under Alert Level 2, which allowed for increased business operations.
Latest BSP data showed outstanding loans by big banks rose by 8.5% in January. Production loans rose by 9.6% year on year, while consumer borrowings increased by a mere 0.1%.
Mr. Ricafort said there is excess liquidity in the financial system, which also reduced banks’ need to borrow from the BSP’s rediscount windows.
Domestic liquidity grew by 9.8% in January, faster than the 7.3% expansion in December.
BSP Governor Benjamin E. Diokno earlier said the BSP has infused about P2.3 trillion in liquidity support to the financial system, which is equivalent to about 12.5% of GDP.
For this month, the central bank’s rediscount rate for peso loans is at 2.5% regardless of maturity.
Meanwhile, applicable rates for dollar and yen-denominated borrowings regardless of maturity are at 2.50429% and 1.98862%, respectively. — Luz Wendy T. Noble
