BANKS left the rediscount facility of the central bank untouched in March as there was ample liquidity in the financial system to service their lending requirements as the economy reopened further.
No availments were made from the peso rediscount and the exporters’ dollar and yen rediscount facility in the first three months of 2021, the Bangko Sentral ng Pilipinas (BSP) said in a statement on Thursday.
In 2021, lenders only tapped the facility in June, July, and September. These borrowings amounted to P6.12 million, significantly smaller than the P26.9 billion in 2020.
The central bank’s rediscount facility gives lenders access to additional money supply by posting their collectibles from clients as collateral.
In turn, banks may use the cash denominated in peso, dollar or yen denominations to extend credit to corporate or retail clients and service unexpected withdrawals.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said banks did not avail of rediscount loans amid ample liquidity in the financial system.
“This reflects the relatively strong capital and overall financial position of banks amid the recent acceleration in the growth of bank loans, as the economy reopens further towards greater normalcy,” Mr. Ricafort said in a Viber message.
Domestic liquidity grew by 8.5% for the second straight month in February, preliminary data from the BSP showed.
Outstanding loans by big banks also rose by 8.8% that month, picking up from the 8.4% pace seen in January.
Starting March, Metro Manila and some provinces were placed under the most relaxed Alert Level 1. This allowed more businesses to increase their operations.
For April, peso rediscount loans will have a rate of 2.5%, regardless of maturity.
Meanwhile, dollar and yen-denominated borrowings will be priced at 2.96157% and 2.00095%, respectively. — LWTN