Banks availing less from BSP rediscount window

MANILA, Philippines - Borrowings under the Bangko Sentral ng Pilipinas’ rediscount facilities continued to drop as of June, indicating banks have enough liquidity to cover their funding needs.

Loan availments of thrift and rural banks under the peso rediscount facility fell 95.2 percent to P735 million in the first half this year from the P15.468 billion recorded in the same period last year.

Bulk or 82.1 percent of the availments went to commercial credits, while 3.6 percent were used for agricultural and industrial credits. The remaining 14.3 percent were utilized for permanent working capital, other services, capital expenditures, and housing, BSP data showed.

The 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 tapping the facility.

Dollar rediscount facility availments plunged 93.7 percent to $4.8 million in the first half of the year, benefitting two exporters.

Meanwhile, there were no availments made under the yen rediscount facility in the first six months.

Fewer availments made under the rediscount facilities show banks’ strong liquidity position.

Latest BSP data showed total resources of the banking system reached P10.455 trillion as of March 2014, up 24 percent from P8.419 trillion in 2013.