Rediscounting loans up 22%

MANILA, Philippines - Bank loans from the Bangko Sentral ng Pilipinas (BSP) continued to grow in the first quarter as lenders sought additional funds to finance their lending activities.

For the first three months, peso loans granted under the BSP’s rediscounting facility hit P10.987 billion, up 22.3 percent from P8.987 billion a year ago.

The rediscounting facility allows banks to borrow money from the central bank, at lower costs, proceeds of which usually finance lending to consumers and investors.

More lending by the banks, in turn, is expected to boost economic activity and in the process, benefit economic growth.

As of March, interest charged to borrowed money was pegged at 3.5 percent.

Out of the total availments from January to March, 88.2 percent went to fund commercial projects, 5.1 percent went to finance capital expenditures, 5.1 percent to other services and 0.2 percent as permanent working capital.

Meanwhile, banks also tapped the BSP’s dollar loan facility under the rediscounting window with $46.1 million, up 38.4 percent from $33.3 million a year ago.

Dollar rediscounting loans are usually used by exporters to pay for their shipments. From January to March, a total of 20 exporters benefitted from the facility.            

BSP Deputy Governor Nestor Espenilla Jr. said despite their healthy position, banks continued to utilize the rediscounting platform for additional funds to lend on specific industries such as the export market.