The central bank’s peso rediscounting facility increased to P26.9 billion or up P6.2 billion as of end-September compared to P20.7 billion end-August.

The rediscounting releases were however lower than same period last year of P118.67 billion.

The Bangko Sentral ng Pilipinas (BSP) has been reporting an unmoving rediscounting number of P20.7 billion since April this year. The banking system was awash with liquidity after the BSP injected P1.5 trillion of liquidity by end-September. This is now further increased to P1.9 trillion as of the first week of October after the central bank advanced P540 billion to the National Government to finance the budget deficit.

For the January to September period, rediscounting availments represent borrowings against banks’ credits on transactions related to commercial and other credits.

The BSP said other credits accounted for 81.94 percent of the total rediscounting loans during the period. These are broken down as: 71.26 percent bank loans for capital asset expenditures; 10.67 percent permanent working capital; and 0.01 percent for housing.

Commercial credits, on the other hand, accounted for 18.06 percent of the total rediscounting loans pertain. These are bank loans for importation with a share of 10.93 percent and trading of goods with 7.13 percent.

There were still zero availments for the Exporters’ Dollar and Yen Rediscount Facility (EDYRF).

The BSP has extended the temporary reduction of the term spread on peso, US dollar and Japanese yen

rediscounting loans until January 31, 2021 as “part of the BSP’s measures to continuously provide the needed liquidity to banks for purposes of maintaining price and financial stability as the economy recovers from the effects of the coronavirus disease” in the country.

The applicable rediscount rate is still 2.75 percent regardless of loan maturity or 1-day to 180-day while EDYRF rates is 2.22038 percent for US dollar and 1.90083 percent for Japanese yen, also regardless of loan maturity which was 1-day to 360-day.

The previously granted temporary measures lapsed on September 30. This is the third time that a fixed rediscount term as relief to banks have been extended by the Monetary Board.

BSP Governor Benjamin E. Diokno has said that the rediscount rates was still in line with its accommodative stance to further ease the cost of borrowing and ensure ample credit and liquidity in the financial system as the government eases quarantine restrictions and the COVID-19 economy in recession will gradually recover.

Qualified banks can avail of the BSP’s rediscounting credit facility for temporary liquidity requirements by refinancing the loans they extend to their clients using the eligible papers of its end-user borrowers. Accepted eligible papers or credit instruments are classified as commercial credits, production credits and other credits.

Other credits as defined by the BSP are special credit instruments such as but not limited to microfinance, housing loans, services, agricultural loans with long gestation period, and medium and long-term loans.

Commercial credits are credits from importation, exportation, purchase, sale, local transportation or storage of non-perishable and insured goods or products in authorized bonded warehouses or in other places approved by the Monetary Board.