By Lee C. Chipongian
The central bank said it released P14.46 billion worth of rediscounting loans in January, a stark contrast to same time in 2018 which had zero availments.
Based on the Bangko Sentral ng Pilipinas (BSP) data, bulk of loans in its Peso Rediscounting Facility or 56.93 percent were released as commercial credits and approved mostly as import loans and trading loans. Import loans accounted for 51.60 percent and 5.33 percent for trading loans.
The remaining loan releases were classified as “other credits” which accounted for 43.07 percent of the total. These are special credit instruments not otherwise rediscountable under commercial and production credits, such as but not limited to microfinance, housing loans, services, agricultural loans with long gestation period. This also includes medium and long-term loans covered by credit instruments with maturities of not more than 10 years from date of rediscount, depending on the type of credit.
Of these, 41.96 percent were capital asset expenditures and a mere 1.11 percent were other services.
Rediscounting is one of the BSP’s standing credit facility and enable banks to liquidate and refinance loans using securities as collaterals. The rediscounting cycle helps sustain the bank’s funds for relending to its borrowers and, at times, service withdrawals.
In 2018, a total of P71.52 billion of rediscounting loans were availed of by commercial banks for liquidity-enhancing purposes. This was hugely higher than P1.59 billion recorded in 2017.
This amount was significantly higher compared to P1.59 billion released from the BSP’s Peso Rediscounting Facility.
At the moment, rediscounting line ranges from 50 percent to 200 percent of adjusted net worth depending on the total credit score of the applicant bank.
The temporary rediscounting line will not exceed 50 percent of adjusted net worth while a qualified bank may avail up to 100 percent of its rediscounting line.