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Banks borrow P3M from rediscount window in Aug.

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LENDERS LOGGED minimal availments from the rediscount window of the Bangko Sentral ng Pilipinas (BSP) in August, showing banks are still armed with enough cash to service their clients’ needs.

“For the period Jan. 1 to Aug. 31, 2020, total availments by banks under the peso rediscount facility amounted to P20.7 billion, with minimal availments in August 2020,” the central bank said in a statement on Thursday.

The BSP said loans in August alone totaled just P3.1 million.

Banks last tapped the peso rediscount facility in March and April.

Loan availments in August were borrowings for transactions related to commercial and other credit.

The bulk (76.75%) were other credit made up of bank loans for capital asset expenditures (62.67%), permanent working capital (13.86%) and housing (0.01%).

Meanwhile, commercial credits comprised 23.46% of total rediscounting loans, which include credit for importation (14.20%) and trading (9.26%) of goods.

On the other hand, there were no availments under the Exporters’ Dollar and Yen Rediscount Facility. In January to August 2019, total loan availments from the facility hit P116.574 billion.

The BSP’s rediscount window lets lenders get hold of additional money supply by posting their collectibles from clients as collateral.

The cash — which is in peso, dollar or yen — may be used by banks to disburse more loans for corporate or retail clients and service unexpected withdrawals.

The minimal availments of peso rediscount loans in August suggest the financial system remains flush with liquidity, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

“There is still so much excess peso liquidity in the financial system even after the RTB (retail Treasury bond) issuance in August, so there is still less need for banks to tap peso funding through the BSP rediscounting facility,” Mr. Ricafort said in a text message.

The central bank slashed the reserve requirement ratio of big banks by 200 basis points (bps) to 12% in April, releasing some P200 billion into the financial system.

In July, the reserve requirements of smaller lenders were likewise trimmed by 100 bps to three percent for thrift banks and two percent for rural banks, respectively, freeing up about P10 billion in liquidity.

Aside from this, the central bank has also allowed banks to count their loans disbursed to small businesses as well as to non-conglomerate large enterprises as part of their reserve requirement compliance.

For this month, peso loans regardless of maturity will be priced at 2.75%, which is the current lending rate set by the BSP.

Meanwhile, applicable rates for dollar- and yen-denominated loans regardless of maturity will be at 2.25588% and 1.94767%, respectively. — Luz Wendy T. Noble





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