130.62

BSP re­dis­count­ing loans grow to bil­lion

Manila Bulletin - - Business News - By LEE C. CHIPONGIAN

Banks have availed of 30.62 bil­lion loans and ad­vances from the cen­tral bank’s peso re­dis­count fa­cil­ity as of end-Septem­ber to meet their liq­uid­ity re­quire­ments.

This amount was big­ger com­pared to same time last year of only mil­lion. It is also bil­lion more than the pre­vi­ous month’s bil­lion.

The Bangko Sen­tral ng Pilip­inas’ (BSP) peso re­dis­count fa­cil­ity 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.

In ef­fect, the re­dis­count­ing cy­cle 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.

BSP data show that from Jan­uary to Septem­ber, 74.93 per­cent of re­dis­count­ing loans were re­leased as other cred­its and dis­trib­uted as other ser­vices, cap­i­tal as­set ex­pen­di­tures, per­ma­nent work­ing cap­i­tal and hous­ing.

About 30.93 per­cent are cred­its to other ser­vices, 28.20 per­cent for cap­i­tal as­set ex­pen­di­tures, 15.78 per­cent for per­ma­nent work­ing cap­i­tal and 0.02 per­cent for hous­ing.

The rest of the re­dis­count­ing loans or 25.04 per­cent went to com­mer­cial cred­its while pro­duc­tion cred­its ac­counted for only 0.03 per­cent, ac­cord­ing to the BSP.

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, said the BSP.

In 2013 the BSP amended its peso re­dis­count­ing fa­cil­ity and cre­ated two win­dows to en­cour­age the big banks to ac­cess their tem­po­rary fund­ing re­quire­ment from the mar­ket rather than from the BSP.

The univer­sal and com­mer­cial banks have Re­dis­count­ing Win­dow I, and thrift banks, ru­ral and co­op­er­a­tive banks have Re­dis­count­ing Win­dow II.

In June of last year how­ever, the BSP uni­fied the re­dis­count­ing win­dow again and ter­mi­nated the sun­set pro­vi­sion for thrift banks, ru­ral and co­op­er­a­tive banks ahead of the Novem­ber 2018 sched­ule af­ter not­ing that these banks no longer re­quire its own re­dis­count­ing win­dow.

The BSP said that based on sur­veys and the sta­tis­ti­cal data of thrift banks, ru­ral and co­op­er­a­tive banks, these banks are no longer de­pen­dent on BSP funds.

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