Friday, July 12, 2013

Bangko Sentral: Peso Rediscount Loans Plunge

Loans under the Bangko Sentral ng Pilipinas’ peso rediscount facility posted a hefty decline in the first semester year-on-year as the financial system remains awashed with cash.

In a statement Wednesday, July 3 the central bank said banks took out some P15.46 billion under the facility in the six months to June, down by 28.2 percent from the P21.53 billion a year earlier.

The rediscount window allows banks to meet short-term liquidity needs by borrowing from the central bank using clients’ promissory notes as collateral.

The bulk or 83.3 percent of the credit were used for commercial purposes, the rest were for agriculture, industrial credits and capital expenditures.

The peso rediscount rate was pegged to the policy rate of 3.5 percent—a record low kept by monetary authorities since October last year.

Dollar credits banks took under the exporters dollar and yen rediscount facility declined by 8.1 percent in the first half to $75.6 million from $82.3 million in the same comparable period.

Seven commercial and thrift banks tapped the facility benefiting 28 exporters.

No yen-denominated loan was disbursed in the first half.

The rate for loans under the exporters dollar rediscount window was set at 0.19465 percent a year, and at 0.11714 percent under the yen rediscount facility. The rates were based on the London Interbank Offered Rate when the rediscount facility contracted for the first time in the five months to May, Bangko Sentral Deputy Governor Diwa Guinigundo said this was caused by “ample liquidity in the system.”

Domestic liquidity—a broad measure of money in the financial system—grew by 16.3 percent to P5.345 trillion in May from P4.597 trillion a year earlier, the latest central bank data showed. (GMA News)  /MP

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