BSP Rediscount Window Left Untapped in January and February
The Bangko Sentral ng Pilipinas (BSP) stated that there were no loan transactions made from the Peso Rediscount Facility (PRF) and the Exporters’ Dollar and Yen Rediscount Facility (EDYRF) in January and February 2023.
According to their statement on March 7, lenders left the bank’s rediscount facility untouched in the past two months amid ample liquidity in the Philippines.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort cited that lenders did not tap BSP’s rediscounting facilities.
Ricafort discussed, “Banks also have other funding sources such as deposit generation, interbank loans, other lending facilities of the BSP (other than rediscounting), other fundraising modes in the capital markets such as through the issuance of stocks, bonds, commercial papers, among others.”
The rediscount window only had transactions in April, June, and October last year with a total loan amount of ₱15.3 billion. On the other hand, EDYRF was last tapped in 2016 for a dollar rediscounting loan.
Banks in the Philippines tap the BSP’s rediscounting window for further money supply by posting their collectibles from clients as collateral. These banks can use cash, denominated in peso, dollar, or yen, to extend credits to corporate or retail clients and service unexpected withdrawals.
According to BSP, loans transacted by big banks rose by 10.4% to ₱10.71 trillion in end-January from ₱9.70 trillion in the previous year. Moreover, lending by production activities rose by 9.2% annually, slower than the revised 12.4% growth in December.
For March 2023, the applicable rate for peso rediscount loans will be 7.5891% for 90 loan maturity days, and 8.1782% for 91 to 180 days. Meanwhile, dollar borrowings will cost 7.393% (1 to 90 days), 7.6555% (91 to 180 days), and 7.8383% (181 to 360 days).
Furthermore, Yen-dominated borrowings will be at 2.09875% (1 to 90 days), 2.12583% (91 to 180 days), and 2.18537% (181 to 360 days).