Rediscounting loans unchanged at P122.17B in first 11 months

Published December 10, 2019, 12:00 AM

by manilabulletin_admin

By Lee C. Chipongian

The central bank released P122.167 billion worth of loans under its Peso Rediscount Facility as of end-November, more than the P56.818 billion borrowed same time in 2018.

The Bangko Sentral ng Pilipinas (BSP) said the January-November amount is unchanged from what was reported as of end-October. “(This is) due to non-availment from rediscounting banks in November 2019.”

The rediscounted loans are borrowings against banks’ credits on transactions related to commercial, production and “other credits”. It is a standing credit facility that allow banks to liquefy their position by refinancing loans and using eligible papers of its end-user borrowers as collaterals.

The rediscounting cycle also helps sustain the bank’s funds for relending to its borrowers and, at times, to service withdrawals. Commercial credits, production credits and “other credits” are papers eligible for rediscounting.

The BSP said “other credits” accounted for 65.13 percent of the total rediscounting loans. These are broken down as 38.75 percent bank loans for capital asset expenditures, 19.62 percent loans to other services, 6.72 percent permanent working capital, and 0.04 percent housing loans.

Commercial credits, in the meantime, accounted for 34.86 percent of total rediscounting releases, and these are bank loans for importation at 24.93 percent, trading at 9.92 percent and 0.01 percent export of goods or products. However only 0.01 percent are production credits which are bank loans for agricultural production.

Rediscounting line have ranges, or 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.

A qualified bank may avail up to 100 percent of its rediscounting line, provided all rediscounting loans are fully collateralized subject to prevailing rediscounting policy.