Banks leave central bank’s rediscount facility untapped

BANKS again left the Bangko Sentral ng Pilipinas’ (BSP) rediscount facility untouched in September amid continued excess liquidity in the financial system.

The central bank’s peso rediscount window was untapped last month, the BSP said in a statement on Monday.

The peso rediscount window was last used in April, June and October last year for loans reaching P15.3 billion. This was more than double the P6.12 billion seen in 2021.

The Exporters’ Dollar and Yen Rediscount Facility (EDYRF) was also unused in September. The last time an availment was made under the EDYRF was a dollar rediscounting loan in 2016.

The BSP’s rediscount window gives banks access to additional money supply by posting their collectibles from clients as collateral.

Banks can use the cash — denominated in peso, dollar or yen — to extend loans to their corporate or retail clients and service unexpected withdrawals.

The rediscount windows were untapped last month as there was ample liquidity in the financial system, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Banks also have other alternative sources of funding such as deposits, interbank borrowings, and other fundraising activities in the capital markets, such as through the issuance of bonds, stocks, and other securities,” Mr. Ricafort added.

Banks also remained well-capitalized following infusions from their investors and profit growth, lessening their need to tap the BSP’s rediscount windows, he said.

“Slower loan demand by banks recently also reduced the need to tap the BSP’s rediscounting facilities,” Mr. Ricafort added.

OCTOBER RATESFor this month, the BSP set the applicable rate for peso rediscount loans at 7.5856% for those maturing in 90 days and at 7.9212% for those due in 91-180 days.

Meanwhile, dollar borrowings will be priced at 7.8883% (1-90 days), and 7.95350% (91-180 days) and 7.95350% (181-360 days).

Lastly, yen-denominated loans will have an interest rate of 2.05375% (1-90 days), 2.08625% (91-180 days) and 2.15250% (181-360 days).

“The applicable spread, as may be determined by the BSP, may change periodically to complement the changes in the BSP’s monetary policy goals and reflect movements in market interest rates,” the central bank said. — AMCS