Rediscount borrowings by banks decline in May

BANKS TOOK less loans out of the central bank’s rediscount window in May, with the credit going to their purchases and commercial credits.

Peso rediscount loans reached P12.075 billion last month, down from the P21.423 billion borrowed in April, the Bangko Sentral ng Pilipinas (BSP) reported Monday.

However, total loan availments last month surged from the P1.266 billion recorded in the same month in 2018, central bank data showed.

The central bank’s rediscount facility lets banks get their hands on additional cash by accepting a lender’s collectibles as collateral for short-term credit.

The banks can then use the fresh money supply — either in peso, dollar or yen — to hand out more loans for corporate or retail clients, as well as service unexpected withdrawals.

Rediscount credit lines amounted to P85.799 billion from January to May, compared with the P8.917 billion secured by banks in the first five months of 2018.

In a statement, the BSP said majority of the loans funded capital expenses accounting for 42.91% of the sum. Commercial credits stood at 35.48% of the total, with more than a fifth meant for imports while less than a tenth used for goods trading. These are followed by credit for other services (16.32%), permanent working capital (5.22%) and housing loans (0.06%).

On the other hand, the dollar and yen rediscount window meant for exporters stood untouched, according to the BSP, much like the trend observed for the past few years.

RATES
Meanwhile, for this month, rates for peso rediscount loans remain unchanged.

Rediscount rates for peso loans stand at 5.0625% for loans maturing in 90 days or less, while those with a 91 to 180-day term are priced at 5.125%. These are based on the latest available BSP overnight lending rate plus a premium.

Dollar credit lines come with a lower rate of 4.5025% for one to 90-day loans; 4.565% for 91- to 180-day loans; and 4.6275% for 181- to 360-day loans, the BSP said.

Meanwhile, the rates for yen loans climbed to 1.93933% for one to 90-day loans, 2.00183% for 91- to 180-day loans, and 2.06433% for 181- to 360-day loans.

These reflect the 90-day London inter-bank offered rate as of end-May plus 200 basis points and a premium. — Karl Angelo N. Vidal