Rediscount loans rise in October

LOANS TAKEN OUT by banks from the central bank’s rediscount window rose in October from the previous month, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Peso rediscount loans totalled P3.493 billion last month, higher than the P2.1 billion recorded in September, the central bank reported on Monday.

Total availments from January to October hit P122.167 billion, ballooning from the P47.176 billion borrowed in the same period of 2018.

The BSP allows banks to hold on to additional money supply by posting their collectibles from clients as collateral through the rediscount window.

For their part, lenders can opt to use fresh cash — whether in peso, dollar, or yen — to disburse more loans for corporate or retail clients and service unexpected withdrawals.

The central bank said in a statement Monday the bulk of the loans during the first ten months of the year were used to fund other credits, amounting to 65.13% of the total. This was comprised of credit for capital asset expenditures (38.75%), loans to other services (19.62%), permanent working capital (6.72%) and housing loans (0.04%).

On the other hand, commercial credits made up 34.86% of the total borrowings which lenders used to disburse loans related to importation (24.93%), trading (9.92%), and export (0.01%) of goods or products.

Meanwhile, production credits cornered 0.01% of the total loans were geared towards agricultural production.

RATES

For the month of November, rediscount rates are at 4.5625% for peso loans maturing in 90 days or less, while those with a 91- to 180-day term are priced at 4.625%.

These are based on the latest available BSP overnight lending rate plus a premium.

On the other hand, dollar credit lines have lower rates at 3.90225% for one- to 90-day loans; 3.96475% for those maturing within a 91- to 180-day time frame; and 4.02725% for 181- to 360-day loans. Rates for yen loans are at 1.885% for one to 90-day loans; 1.9475% for 91to 180-day loans; and 2.01% for loans maturing within a 181- to 360-day period.

These are based on the 90-day London Inter-Bank Offered Rate as of end-October plus 200 basis points, plus term premia.