Rediscount facility untapped for sixth straight month
BANKS did not tap the rediscount facility of the Bangko Sentral ng Pilipinas (BSP) in April amid the excess liquidity in the financial system.
“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 30 April 2023,” the central bank said in a statement on Monday.
April was the sixth consecutive month that the rediscount window was not used by lenders.
Last year, the rediscount window was only tapped in April, June, and October, with loans reaching P15.3 billion, more than double the P6.12 billion in 2021.
There were likewise no availments under the EDYRF last month.
The last time the EDYRF was tapped was for a dollar rediscounting loan in 2016.
The BSP’s rediscount facility gives banks access to additional money supply by posting their collectibles from clients as collateral. In turn, lenders can use the cash — denominated in peso, dollar or yen — to disburse more loans for corporate or retail clients and service unexpected withdrawals.
“The continued excess liquidity in the financial system alongside improved profitability, better asset quality, and stronger capitalization of banks again allowed banks not to tap the BSP rediscounting facilities,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Outstanding loans by big banks grew by 10.1% to P10.762 trillion in March from P9.77 trillion a year earlier, BSP data showed.
On the other hand, the banking industry’s nonperforming loan ratio went up to 3.31% in January from the 3.28% a month earlier.
Data from the BSP showed that bad loans reached P411.186 billion in February, up by 1.5% from P405.138 billion in January.
Mr. Ricafort added that banks have other source of funding such as deposits, interbank loans, money markets, and capital markets that allow lenders to increase lending to consumers, instead of tapping the BSP rediscounting facilities.
MAY RATES
For this month, the applicable rate for peso rediscount loans will be at 7.5751% for those maturing in 90 days, and at 7.9002% for those due in 91 to 180 days.
Meanwhile, dollar borrowings will be priced at 7.5680% (1-90 days), 7.5680% (91-180 days), 7.5680% (181-360 days).
Yen-dominated borrowings will be priced at 2.0850% (1-90 days), 2.09625% (91-180 days), 2.1260% (181-360 days). — Keisha B. Ta-asan
