PHILIPPINE BANKS increased their usage of the Bangko Sentral ng Pilipinas (BSP) peso rediscount facility in October to P370 million, against P133 million in September.

In the 10 months to October rediscount transactions amounted to P973 million, well below the P1.74 billion a year earlier.

Philippine banks can borrow from the BSP’s rediscount facility to meet their short-term funding needs.

Banks issue promissory notes backed by client loans to tap the facility. The funds can be used to issue more loans or service withdrawals.

The BSP imposed uniform borrowing rates on July 21 with the closure of the special window for thrift, rural, and cooperative banks.

The BSP has two rates for short-term secured peso borrowings: 90-day loans at 3.5625%, and 180-day loans at 3.625%.

Central bank officials have said that liquidity remains ample in the financial system, limiting the use of the rediscount facility as banks continue to hold enough cash for their day-to-day transactions. — Elijah Joseph C. Tubayan