BANKS did not tap the central bank’s rediscount facility last month as liquidity in the financial system remained ample.
“There were no availments on the rediscounting lines of banks with the BSP under the Peso Rediscount Facility and Exporters’ Dollar and Yen Rediscount Facility (EDYRF) for the period covering 01 to 31 January 2023,” the Bangko Sentral ng Pilipinas said in a statement on Tuesday.
Lenders likewise left the facility untouched in the same month in 2022. The rediscount window only saw availments in April, June and October last year, with cumulative loans hitting P15.3 billion.
The last time the EDYRF was tapped was for a dollar rediscounting loan in 2016.
The central bank’s rediscount window gives banks access to additional money supply by posting their collectibles from clients as collateral.
The BSP’s rediscount facility gives banks access to additional liquidity by letting them post collectibles from clients as collateral.
In turn, lenders can use the cash, which could be in peso, dollar, or yen, to lend more to their corporate or retail clients and service unexpected withdrawals.
Banks did not borrow from the rediscounting facilities in January due to excess liquidity in the financial system after the holidays and amid better asset and loan quality, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“Banks also have other funding options other than the BSP rediscounting facilities such as interbank borrowings, deposits, fund-raising via the capital markets such as the issuance of bonds and stocks, among others,” he said.
Outstanding loans issued by universal and commercial banks increased by 13.4% year on year to P10.9 trillion in December, slower than the revised 13.9% growth in November, preliminary data from the BSP showed.
Credit for production activities jumped by 12.1% to P9.56 trillion, slowing from the revised 12.6% growth in November.
Banks extended more loans for real estate activities (13.1%); manufacturing (14.9%); electricity, gas, steam and air-conditioning supply (14.4%); motor vehicles (12.7%); and information and communication (21.6%).
In the same month, domestic liquidity rose by 6.4% year on year to P16.3 trillion in December.
Meanwhile, the banking industry’s bad loans fell for the 10th straight month in December 2022, bringing the nonperforming loan (NPL) ratio to its lowest in 28 months.
Banks’ gross NPL ratio dropped to 3.17% in December, from 3.97% a year ago and 3.35% in November, BSP data showed. This was the lowest ratio in more than two years or since 2.84% in August 2020.
Soured loans declined 11.6% to P399.53 billion in December, from P452.45 billion a year earlier. This was also 2.1% lower than P408.1 billion in November.
FEBRUARY RATESFor February, the applicable rate for peso rediscount loans will be at 7.1148% for 90 loan maturity days, and at 7.7296% for 91-180 days.
Meanwhile, dollar borrowings will be priced at 7.183% (1-90 days), 7.328% (91-180 days), 7.34450% (181-360 days).
Yen-dominated borrowings will be priced at 2.08875% (1-90 days), 2.12% (91-180 days), 2.1775% (181-360 days). — K.B. Ta-asan