NONE of the large universal lenders and their regular commercial banking counterparts took advantage of the central bank’s rediscounting window at any time this year.
This resulted to a sharp 93-percent reduction in rediscounted funds of only P1.017 billion in the first 11 months, from P1.735 billion last year, by thrift and rural lenders who need to turn around quickly and service the financing requirements of both Metro Manila and countryside clients.
The lack of patronage by the large universal and commercial lenders of the rediscounting window of the Bangko Sentral ng Pilipinas (BSP) betrays the highly liquid state of the banking system as a whole, and bodes well for the $270-billion economy looking to capitalize on a well-oiled financial system to achieve sustainable long-haul growth exceeding 6 percent this year in terms of the gross domestic product (GDP).
The BSP said on Wednesday the total availment of thrift and rural banks from the rediscounting window hit P1.017 billion from January to November this year. This was 93.1 percent lower than the P1.735 million in the same period last year.
There was no availment of rediscounted funds from universal and commercial banks during the period.
The rediscounting window is designed to assist banks meet their liquidity needs.
This is achieved by allowing qualified banks to get loans or advances from the BSP using eligible papers of their borrowers as collateral.
The low volume of rediscounts means the banks do not need as much liquidity assistance as they have enough of the same to underwrite their lending operations.
Of the total availment during the period; 79.5 percent went to commercial credits; 5.6 percent went to agricultural and industrial credits; 4.9 percent to working capital; 4.7 percent to capital expenditures; 1.1 percent to housing; and 4.2 percent to other services.
Parallel to lower peso availment of the rediscount window was the lower aggregate dollar rediscounts during the period.
The BSP said the Exporters’ Dollar and Yen Rediscount Facility (EDYRF) posted a decline by 91.6 percent to only $9.2 million. The rediscounts benefited three exporters.
There were no yen-denominated rediscounts under the EDYRF during the period.