Rediscount loans jump 71% to P122.2 B in 2019

Banks further beefed up their lending portfolios as loans from the rediscount window of the Bangko Sentral ng Pilipinas (BSP) jumped by 71 percent to a record high of P122.17 billion last year from P71.52 billion in 2018.

Data released by the central bank yesterday showed other credits or special credit instruments such as but not limited to microfinance, housing loans, services, agricultural loans with long gestation period, and medium and long-term loans accounted the bulk or 65 percent of the total disbursements under the peso rediscount facility.

According to the BSP, loans for capital asset expenditures accounted for 38.7 percent, while loans to other services accounted for 19.6 percent, and loans for permanent working capital cornered a 6.7 percent share.

The BSP said commercial credits resulting from the importation, exportation, purchase, sale, local transportation or storage of non-perishable and insured goods or products in Monetary Board-approved storage facilities cornered a share of 34.9 percent of the total rediscounting loans.

About 24.9 percent went to import loans, while 9.9 percent went to trading loans.

Rediscounting is a BSP credit facility extended to qualified banks with active rediscounting lines to meet their temporary liquidity needs by refinancing the loans they extend to their clients using the eligible papers of its end-user borrowers.

The BSP said there were no availments from rediscounting banks for the months of November and December.

Likewise, there was also no availment under the Exporters Dollar and Rediscount Facility (EDYRF) last year.

The BSP currently pegged the rediscount rates for loans under the peso rediscount facility at 4.5625 percent for loans with maturity of up to 90 days and 4.6250 percent for loans with maturity of up to 180 days.

The benign inflation environment and slower-than-expected gross domestic product (GDP) growth allowed the BSP to slash interest rates by 75 basis points, partially unwinding a tightening cycle that saw rates jump by 175 basis points in 2018.

It also lowered the reserve requirement ratio for big and mid-sized banks by 400 basis points and for small banks by 200 basis points, releasing about P450 billion in additional liquidity into the financial system.