Rediscounting loans total P11.6 B

Published July 7, 2022, 6:59 PM

by Lee C. Chipongian

The Bangko Sentral ng Pilipinas’ (BSP) peso rediscounting facility released P11.6 billion in the first six months, significantly bigger compared to same time in 2021 of only P4 million.

This is just one bank, said the BSP on Thursday, July 7. The unidentified universal bank’s rediscounting loan was secured by the bank’s credit instruments from its commercial and other credits.

Last month, there is also only one bank that availed of P4.1 billion rediscounting loan from the central bank.

Philippine P1,000 bills

Rediscounting is a BSP credit facility extended to qualified banks with active rediscounting lines to meet their temporary liquidity needs by refinancing the loans they extend to their clients using the eligible papers of its end-user borrowers.

The BSP said there are still no availments for the Exporters’ Dollar and Yen Rediscount Facility (EDYRF) as of end-June. The EDYRF has had no availments since 2016.

Banks are still awash with cash and they prefer to place or park their funds in BSP’s open market operations, term deposit facility and securities facility, for interest earnings.

The rediscounting loans are classified by type of underlying credit such as commercial, production or other credits based on the eligible papers offered by banks as collateral.