BANKS continued to leave the rediscount facility of the Bangko Sentral ng Pilipinas (BSP) untouched in October amid ample liquidity in the financial system.
Banks likewise did not tap the Exporters’ Dollar and Yen Rediscount Facility (EDYRF) in the previous month, the central bank said on Tuesday.
The peso rediscount window last saw availments in April, June and October last year, with cumulative loans hitting P15.3 billion. Meanwhile, the last time the EDYRF was tapped was for a dollar rediscounting loan in 2016.
The BSP’s rediscount facility gives banks access to additional liquidity by letting them post collectibles from clients as collateral.
Lenders can use the cash, which could be in peso, dollar, or yen, to lend more to corporate or retail clients and service unexpected withdrawals.
Banks did not borrow from the rediscounting facilities in October due to excess liquidity in the financial system, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“Banks have more than enough capital buffers that could be used for additional lending activities,” he said, adding that improved profitability allowed them to lend more.
“Some banks have also raised additional capital from investors that may be used for additional lending and investments activities. Banks also have other alternatives to raise funding such as through the equity and bonds market, interbank market, increased deposits,” Mr. Ricafort said.
Money supply or M3 — which is considered as the broadest measure of liquidity in an economy — rose by 6.8% to P16.5 trillion in August, preliminary data from the central bank showed.
This was faster than the 5.7% growth in July.
Meanwhile, loans disbursed by big banks went up by 7.2% to P11.07 trillion as of end-August from P10.33 trillion seen in the same period last year.
This was slower than the 7.7% increase recorded in July.
NOVEMBER RATESFor this month, the applicable rate for peso rediscount loans will be at 7.733% for those maturing in 90 days and at 7.966% for those falling due in 91-180 days.
Meanwhile, dollar borrowings will be priced at 7.8888% (1-90 days), 7.9559% (91-180 days), and 7.9559% (181-360 days).
Yen-dominated borrowings will be priced at 2.088% (1-90 days), 2.121% (91-180 days), and 2.20693% (181-360 days). — K.B. Ta-asan