Rediscount loans go up

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LENDERS continued to borrow from the central bank’s rediscount facility.

BANKS CONTINUED to take out loans from the central bank’s rediscount window in July, with the credit going to commercial, production and other transactions.

Peso rediscount loans reached P8.921 billion last month, albeit lower than the P21.854 billion borrowed in June, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday.

Total availments from January to July amounted to P116.574 billion, surging from the P10.614 billion borrowed in the same period last year.

Through the rediscount window, the BSP lets banks get hold of additional money supply by posting their collectibles from clients as collateral.

In turn, the banks may use the fresh cash — expressed in the peso, dollar or yen — to grant more loans for corporate or retail clients and service unexpected withdrawals.

In a statement, the BSP said bulk of the loans during the seven-month period were used to fund other credits, amounting to 67.32% of the total — comprised of capital asset expenditures (40.27%), loans to other services (20.56%), permanent working capital (4.05%) and housing loans (0.05%).




Meanwhile, commercial credits had a 35.06% share in the total rediscount borrowings, which banks used for importation (24.66%) and trading of goods and products (10.39%).

Production credits were at 0.01% of the total and went to loans for agricultural production.

On the other hand, the dollar and yen rediscount window catering to export firms remained untouched during the period.

RATES
Meanwhile, for this month, rediscount rates stand at 4.8125% for peso loans maturing in 90 days or less, while those with a 91- to 180-day term are priced at 4.875%.

These are based on the latest available BSP overnight lending rate plus a premium.

On the other hand, dollar credit lines come with a lower rate of 4.2555% for one- to 90-day loans; 4.318% for 91- to 180-day loans; and 4.3805% for 181- to 360-day loans.

Rates for yen loans are at 1.92867% for one to 90-day loans; 1.99117% for 91- to 180-day loans; and 2.05367% for 181- to 360-day loans.

These are based on the 90-day London Inter-Bank Offered Rate as of end-July plus 200 basis points, plus term premia.

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