Jan.-Sept. rediscounting loans drop by 67% — BSP

In light of the strong economy, rediscounting loans released by the Bangko Sentral ng Pilipinas (BSP) plunged by 67.1 percent in January-September this year. BSP data released Monday showed that the level of loan take outs in the first nine months of the year totaled P46.28 billion, down from P140.54 billion a year earlier. Around 54 percent of the rediscounting loans taken by commercial, thrift, and rural banks went to commercial credits, 26.6 percent to other services, 8.5 percent to capital expenditures, 3.2 percent to permanent working capital, and 1.9 percent to housing. About 5.2 percent under the peso rediscounting facility went to agriculture and industrial credits while less than 0.1 percent went to microfinance, the BSP said. Under the exporters’ dollar and yen rediscounting facility (EDYRF), total take outs rose to $59.1 million from $43 million in the same comparable period, the central bank said. There were no loan take outs under the yen rediscounting facility in January-September, the BSP added. Rediscounting is a standing credit facility offered by the BSP to help banks meet temporary liquidity needs by refinancing the loans given to banks' clients. Monetary authorities use rediscounting loans as a monetary tool to regulate liquidity. The Bangko Sentral estimated its peso rediscounting rate at 4 percent annually for all maturities effective Feb. 1. The central bank likewise pegged the rates for October at 0.25625 percent a year under the EDYRF and 0.14 percent for its yen rediscounting window. The BSP said it restored the loan value of all eligible rediscounting papers to 80 from 90 percent of the borrowing bank’s credit instrument. The central bank also revived the non-performing loan (NPL) ratio requirement of 2 from 10 percentage points above the latest available industry average NPL for banks wishing to use the rediscounting facility. The peso rediscounting loans excluded the P9 million given to micro, small, and medium enterprises (MSMEs) affected by tropical storm Ondoy and typhoon Pepeng last year. The Monetary Board had approved an additional P5-billion budget for rediscounting to cover typhoon-affected MSMEs. The amount was on top of the P60-billion rediscounting budget. The P5-billion budget previously allotted to assist bank customers affected by Ondoy and Pepeng was repurposed to help clients affected by the El Niño weather phenomenon. — JE/VS, GMANews.TV