Rediscount loans down 44%

MANILA, Philippines - Loans under the rediscount facility of the Bangko Sentral ng Pilipinas (BSP) declined 44 percent to P16.409 billion in the first eight months of the year from P29.349 billion in the same period last year.

Of the total loan availments, 81.7 percent went to commercial credits, three percent to agricultural and industrial credits, and 15.3 percent to other credits such as capital expenditure, other services, permanent working capital, and housing.

Loans under the BSP’s dollar rediscount facility also went down during the same period.

The central bank said loans under the facility amounted to $87.9 million in January to August, 28.6 percent lower than last year’s $123.1 million.

Meanwhile, the yen rediscount facility remained untapped as of August, the BSP said.

The central bank’s rediscount facility allows banks to borrow from the BSP in order to meet short-term liquidity needs. Banks use their clients’ promissory notes as collateral when availing of the loans.

The peso rediscount rate is currently pegged on the BSP’s overnight borrowing rate of 3.5 percent.

The decreasing availments of the facility may indicate the healthy state of the local banking industry.

Total bank resources amounted to P8.639 trillion as of May, 14 percent higher than  the P7.576 trillion recorded in the same period last year.