LENDERS left the rediscount facility of the Bangko Sentral ng Pilipinas (BSP) untapped again in August as there was enough liquidity in the financial system.

In a statement on Monday, the BSP said its peso rediscount window was untouched anew last month. Total borrowings for the first eight months remained at P11.6 billion, which was from separate availments worth P4.08 billion and P7.52 billion made by a universal bank in April and June, respectively.

The Exporters’ Dollar and Yen Rediscount Facility (EDYRF) was also untapped in August. The last time an availment was made under the EDYRF was a dollar rediscounting loan in 2016.

In 2021, banks only borrowed from the BSP’s rediscount facility in June, July, and September. These peso rediscount loans amounted to P6.12 million.

The BSP’s rediscount window gives banks access to additional money supply by posting their collectibles from clients as collateral.

In turn, banks may use the cash — denominated in peso, dollar or yen — to extend more loans to their corporate or retail clients and service unexpected withdrawals.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said there were no rediscount loans again last month amid “continued excess liquidity in the financial system.”

M3, which is considered as the broadest measure of liquidity in an economy, grew by 7% year on year to P15.4 trillion in July.

Meanwhile, preliminary data from central bank showed outstanding loans of big banks expanded by 12% to P10.21 trillion in July.

“Furthermore, the reduction/improvement in NPL (nonperforming loan) ratio to near two-year lows as the economy reopens further also reduced the need to tap the rediscounting facility,” Mr. Ricafort said.

Despite rising credit, the banking industry’s gross NPL ratio went down to 3.6% in June from 4.48% a year ago. It is also lower than the 3.75% ratio seen in May.

The June NPL ratio was the lowest in 21 months or since 3.5% in September 2020.

“Availability of other funding options for banks such as through the interbank market and the capital markets also reduced the need/urgency to tap the rediscounting facility,” Mr. Ricafort added.

For this month, the applicable rate for peso rediscount loans will be at 4.6469% for those maturing in 90 days and at 5.0438% for those falling due in 91-180 days.

Meanwhile, dollar borrowings will be priced at 5.49661% (1-90 days), 5.89351% (91-180 days) and 6.68731% (181-360 days).

Lastly, yen-dominated loans will have an interest rate of 2.37843% (1-90 days), 2.77533% (91-180 days) and 3.56913% (181-360 days). — Keisha B. Ta-asan