Rediscount loans down as PHL banks remain awash with cash

Loan take out from the Bangko Sentral ng Pilipinas rediscount facility declined for the fifth straight month in September as money remained readily available to banks. 

 

In a statement Thursday, the central bank said banks took out P17.320 billion from the peso rediscount facility in the January to September, down 47.1 percent from P32.761 billion a year earlier. 

 

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

 

Dollar credits under the exporters dollar and yen rediscount facility dropped by 29.2 percent to $95 million in the first eight months from $134.1 million a year earlier. 

 

No yen-denominated loan was taken during the period. 

 

“The domestic market is very rich with liquidity. Marami talagang sources of money yung banks, so I am not surprised why the availment is not that strong,” Patrick Ella, economist at listed Security Bank Corp., said in a phone interview. 

 

In August, domestic liquidity as measured by M3 grew by 30.9 percent to P6 trillion from a year earlier, latest data show.

http://www.gmanetwork.com/news/story/328760/economy/moneyandbanking/money-supply-up-30-in-august-bangko-sentral

 

Ella said most banks only tap the rediscount facility in times of “tight credit.”

 

The peso rediscount rate was pegged in line with the policy rate of 3.5 percent, a record low by since October last year, Bangko Sentral noted. 

 

The rate for loans under the exporters dollar rediscount rate was set at 0.17885 percent a year, and for the yen rediscount facility at 0.11500 percent.

 

 Both rates were based on the London Interbank Offered Rate or Libor. – VS, GMA News