Rediscount facility left untouched
LENDERS did not tap the Bangko Sentral ng Pilipinas’ (BSP) rediscount facility in March as they had enough liquidity to fund their loans.
“There were no availments on the rediscounting lines of banks with the BSP under the Peso Rediscount Facility and Exporters’ Dollar and Yen Rediscount Facility (EDYRF) for the period covering 01 January to 31 March 2023,” the BSP said in a statement on Tuesday.
Lenders likewise left the facility untapped in the same period in 2022. Last year, the rediscount window only saw availments in April, June and October, with cumulative borrowings amounting to P15.3 billion.
The last time the EDYRF was tapped was for a dollar rediscounting loan in 2016.
The central bank’s rediscount window gives banks access to additional money supply by posting their collectibles from clients as collateral.
Banks can use the cash, which could be in peso, dollar, or yen, to lend to their corporate or retail clients and service unexpected withdrawals.
Lenders did not tap the BSP’s rediscount windows amid improved profitability, asset quality, and capitalization, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“This is largely due to improved economic conditions with the further reopening of the economy that led to more employment, sales, earnings that all increase the ability of borrowers to pay their loans, thereby leading to lower NPL (non-performing loan) ratio to among the lowest in more than two years and improved the asset quality of banks,” Mr. Ricafort said.
“Banks also have other sources of funding such as interbank borrowings, deposits, and other fund-raising activities in the capital markets such as through the bond market, money market, and equity market, thereby reducing the need to tap the said rediscounting facilities. Ample liquidity in the financial system also reduced the need for banks to tap the said rediscounting facilities,” he added.
Outstanding loans of big banks grew by 10% to P10.69 trillion at end-February from P9.72 trillion a year earlier, data from the central bank showed.
Meanwhile, domestic liquidity expanded by 6% year on year to P16.1 trillion as of February, faster than the revised 5.6% rise in January.
On the other hand, the banking industry’s NPL ratio went up to 3.28% in January from the 3.16% in the month earlier. This was the highest since the 3.35% seen in November last year.
Data from the BSP showed that bad loans reached P405.138 billion in January, up by 1.6% from P398.79 billion in December 2022. This was 12.2% lower than P461.66 billion a year earlier.
APRIL RATES
For April, the applicable rate for peso rediscount loans will be at 7.867% for those maturing in 90 days, and at 8.484% for those falling due in 91 to 180 days.
Meanwhile, dollar borrowings will be priced at 7.4149% regardless of maturity.
Yen-dominated borrowings will be priced at 2.08636% (1-90 days), 2.11% (91-180 days), and 2.15474% (181-360 days). — Luisa Maria Jacinta C. Jocson
