Local banks in the Philippines have refrained from utilizing the peso and foreign currency-denominated rediscounting facility provided by the Bangko Sentral ng Pilipinas (BSP) in the first half of the year, as the financial system continues to experience ample liquidity.
The BSP’s rediscounting facility offers credit assistance to qualified banks by refinancing loans extended to clients through eligible papers.
The central bank’s recent reduction in reserve requirement ratios has strengthened local banks’ capitalization and liquidity.
From January 1 to June 30, no releases were made under the peso rediscount facility and exporters’ dollar and yen rediscount facility (EDYRF), according to the BSP.
Effective July 10, the rediscount rates stand at 7.3316 percent for 1-90 days loan maturity and 7.4132 percent for 91-180 days. The EDYRF has not been availed since 2016.
Rediscount rates are based on the BSP’s overnight lending rate, while rates for the EDYRF are linked to relevant benchmark rates, subject to periodic adjustments in line with the central bank’s monetary policy goals and changes in market interest rates.
