NextGen Day

The Bangko Sentral ng Pilipinas (BSP) stated that banks took out smaller peso-denominated rediscounting loans in the first nine months of this year, totaling PHP6.12 million, compared to the same time in 2020.

According to data published by the central bank on October 11, 2021, total availments under the Peso Rediscount Facility (RRF), which presently has a 2.5 percent rate, were PHP26.9 billion at the end of September 2021, which is much lower than the PHP26.9 billion a year earlier.

According to the BSP report, “These availments reflect the rediscount of Production Credits that supported industrial processes (65.35 percent) and Other Credits that financed capital asset expenditures (24.81 percent) and permanent working capital (9.84 percent).”

During the same time period, however, there was no availment under the Exporters Dollar and Yen Rediscount Facility (EDYRF), according to the report.

The EDYRF was last used by banks in 2016, according to the BSP, via a US dollar-denominated rediscounting loan.

Its rediscounting facilities seek to help banks meet their liquidity needs by providing loans to banks and allowing them to use their own borrowers’ loans as collateral.

Promissory notes, drafts, or bills of exchange of commercial credits, production credits, or other credits such as microfinance, home loans, services, and agriculture with medium and long-term tenors are among the acceptable documents that banks may use to access the facility.

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