Peso rediscount availments down 93%

MANILA, Philippines - Fewer banks tapped the Bangko Sentral ng Pilipinas’ rediscount facilities last year as the lenders had enough funds to service loans and to act as buffer against external shocks.

Central bank data showed availments under the peso rediscount facility plunged 93 percent to P1.338 billion in 2014 from P17.956 billion in 2013.

Commercial credits accounted for the bulk or 79 percent of loans during the period, while 5.9 percent went to agricultural and industrial credits. Capital expenditure, permanent working capital, housing, and other services gobbled up the remaining 15 percent.

Rediscount facilities allow banks to borrow from the BSP to meet their short-term liquidity needs. The banks use their clients’ promissory notes as collateral when tapping this facility.

Availments under the dollar rediscount facility, meanwhile, also fell 91 percent to $10 million in 2014 from $109.4 million in 2013.

These borrowings were made by a universal bank and a thrift bank, the central bank said, adding these loans benefitted three exporters.

The yen rediscount facility remained untapped last year.

The decrease in the volume of availments reflect banks’ adequate liquidity levels that allow them to fund loans by households and corporate clients.

At the same time, this shows that banks have enough buffer to guard against potential crises, especially with liquidity shocks.

Latest central bank data showed universal, commercial, thrift, and rural banks grew their resources by 15 percent to P10.84 trillion as of September last year from P9.46 trillion in the same period in 2013.

Universal and commercial banks held the bulk of the resources at P9.77 trillion, while thrift banks accounted for P866.3 billion. Rural banks, meanwhile, cornered P206.9 billion of the resources as of September last year.