Peso rediscount loans surge to P71.5 billion in 2018

Mary Grace Padin - The Philippine Star

MANILA, Philippines — Loans availed by banks through the peso rediscount facility surged to P71.52 billion in 2018 following the series of interest rate hikes implemented by the Bangko Sentral ng Pilipinas (BSP) to help ease inflation.

Data from the BSP showed this is almost 45 times higher than the P1.59 billion availments recorded in the previous year.

Rediscounting is a privilege of a qualified bank to obtain loans or advances from the BSP using the eligible papers of its borrowers as collaterals. It is a standing credit facility provided by the central bank to help banks liquefy their position by refinancing the loans they extend to their clients.

According to the BSP, thebulk or 74.90 percent of the total rediscount loans in 2018 were classified as other credits, while the remaining 25.08 percent and 0.02 percent were commercial credits and production credits, respectively. 

Specifically, “other credits” include capital asset expenditures with 53.62 percent, other services with 14.51 percent, permanent working capital with 6.76 percent, and housing with 0.01 percent.

On the other hand, there was no availment under the exporters dollar and yen rediscount facility in 2018.

The BSP earlier raised the rates for loans under the peso rediscount facility to 5.3125 percent for loans with maturity of up to 90 days and to 5.3750 percent for loans with maturity of up to 180 days.

Currently, the BSP’s overnight lending rate is at 5.25 percent, while overnight deposit and overnight reverse repurchase rates are at 4.25 percent and 4.75 percent, respectively.

This is after the BSP delivered a series of rates hikes last year to anchor rising inflationary expectations, bringing to 175 basis points the cumulative increase in interest rates in 2018.    

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