MANILA, Philippines — The Bangko Sentral ng Pilipinas’s (BSP) loans and advances both to banks and the government amounted to P111.26 billion as of the end of November 2011, a slight decline of one percent compared to the same period in 2010.

The BSP loan portfolio is composed of rediscounting, emergency, overnight clearing line (OCL), and loans to the National Government and the Philippine Deposit Insurance Corp. (PDIC).

BSP data show that loans and advances have remained steady and in the same level since the beginning of 2010 after it rose to almost P150 billion in 2009 when banks were taking out liquidity-enhancing loans in the wake of the early global economic and financial decline.

BSP’s special liquidity facility or emergency loans amounted to close to P4 billion. These types of loans are granted at “normal periods” for the purpose of assisting a bank under financial pressures, so long as the bank applying for the facility was not insolvent and has the assets to secure advances.

OCL or overdrafts was still at P2 billion. As for peso rediscounting facility, since early 2010 when the BSP reduced its budget by half, the total loans and advances have declined.

PDIC has the largest of the loans, amounting P105 billion. These are original loans granted to the PDIC since 1993 and include interests and other balances. The banking co-regulator's assistance to closed banks are in the form of new cash infusion, purchase of assets and assumption of liabilities. If it cannot provide or if it has no available funds for these purposes, PDIC could apply for loans from BSP to finance assistance to banks.

The loans extended by BSP to PDIC include the P4.59 billion granted to Allied Banking Corp. as the beneficiary bank for the assisted bank, Orient Bank in 1999; the P10 billion loans to BDO Unibank for First e-Bank in 2002; the P7.2 billion BDO loan to assist United Overseas Bank of the Philippines in 1999; the P1.778 billion loan to Bank of Commerce for Traders Royal Bank in 2002; and the P10.1 billion loan to Export & Industry Export Bank granted in 2006.

Other BSP-backed PDIC loans were the P1.175 billion extended to Keppel Monet Bank in 1997; the P7.64 billion to Philippine Bank of Communications in 2004; P1.274 billion for Planters Development Bank; P23.9 billion for Philippine National Bank in 2001; and P20.5 billion for United Coconut Planters Bank in 2003.