Philippine banks resumed availing of rediscount loans from the Bangko Sentral ng Pilipinas (BSP) in February after it stood untapped a month ago, the central bank reported on Monday, March 12.

Peso rediscount loans surged to P5.81 billion in February, after lenders did not avail of the loans in January. This also came from the P447 million they borrowed in December.

Philippine banks may borrow from the BSP’s rediscount facility so that they can meet their short-term funding needs, which also allows the central bank to fulfill its duty as lender of last resort.

The facility lets banks submit promissory notes from outstanding debts as collateral to acquire fresh money supply. The cash — which may come in the peso, dollar or yen — can then be used to grant more loans or service withdrawals.

The BSP said the majority of the availments, or 71.86%, went to other credits, when broken down, are particularly distributed to capital asset expenditures (67.78%), permanent working capital (3.94%), housing (0.09%) and other services (0.05%).

The remaining portions, on the other hand, went to commercial credits at 28.1% and production credits at 0.04%. — Karl Angelo N. Vidal