MANILA – Banks took out lower peso-denominated rediscounting loans in the first nine months this year amounting to PHP6.12 million compared to the same period in 2020, the Bangko Sentral ng Pilipinas (BSP) reported.
Data released by the central bank on Monday showed that end-September 2021 total availments under the Peso Rediscount Facility (RRF), which currently has a 2.5 percent rate, is way lower than the PHP26.9 billion year-ago.
“These availments represent the rediscount of Production Credits that financed industrial processing (65.35 percent); and Other Credits that funded capital asset expenditures (24.81 percent) and permanent working capital (9.84 percent),” the BSP report said.
However, there was no availment under the Exporters Dollar and Yen Rediscount Facility (EDYRF) during the same period, it said.
BSP said the last time the EDYRF was tapped by banks was in 2016, through a US dollar-denominated rediscounting loan.
Its rediscounting facilities aim to provide a boost to banks’ liquidity requirements by extending loans to banks, with the financial institutions using their own borrowers’ loans as collateral.
Among the eligible papers that banks can use to tap the facility include promissory notes, drafts or bills of exchange of commercial credits, production credits, or other credits like microfinance, housing loans, services, and agricultural with medium and long-term tenors. (PNA)