Rediscount loans jump 37.6% in Q1

MANILA, Philippines - Total rediscounting loan availments by banking institutions surged 37.6 percent in the first quarter of the year amid the sovereign debt crisis in Europe as well as the economic slowdown in the US, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

Data showed that total availments under the central bank’s Peso Rediscount facility amounted to P8.98 billion in the first three months of the year or P2.46 billion higher than the P6.529 billion booked in the same period last year.

Data showed that 82.7 percent of the total rediscounting loans availed of by commercial, thrift, and rural banks last year went to commercial credits while 4.3 percent went to agriculture and industrial clients.

About eight percent went to capital expenditures, 3.4 percent to other services, 1.5 percent to permanent working capital, 0.1 percent to housing.

The BSP reported that aggregate availments under the US dollar facility of the Exporters’ Dollar and Yen Rediscounting Facility fell 30.6 percent to $33.3 million in January to March compared to $48 million in the same period last year.

The facility was offered by 10 commercial banks benefiting 23 exporters.

The BSP said there was no availment under the Yen Facility during the period.

Rediscounting is a standing credit facility provided by the BSP to help banks meet temporary liquidity needs by refinancing the loans they extend to their clients.

Monetary authorities use rediscounting loans as a monetary tool to regulate liquidity.

Last year, total rediscounting loan availments by banking institutions plunged 45 percent to P27.37 billion last year from P49.76 billion in 2010.

The BSP lowered its Peso Rediscount rate at four percent per annum under its Peso Rediscount facility for all maturities effective March 5.

It has also pegged the rates for April at 0.24125 percent per annum under the EDYRF and 0.14429 percent per annum for its Yen facility.