Connect with us

Hi, what are you looking for?

Economy

Rediscount loans fall 77.7% in 2020

LOAN AVAILMENTS from the central bank’s rediscount window plummeted in 2020, with banks tapping the facility for just four months as liquidity remained ample despite the coronavirus crisis.

Credit secured by lenders from the peso rediscount facility of the Bangko Sentral ng Pilipinas (BSP) stood at P26.9 billion as of end-2020, slumping by 77.7% from the P122.167 billion logged in 2019.

“There are no availments under the peso rediscount facility for the month of December 2020,” the BSP said in a statement on Monday.

Banks only tapped the peso rediscount window in March, April, August, and September.

Meanwhile, banks did not tap the Exporters’ Dollar and Yen Rediscount Facility for the whole year.

The rediscount facility lets banks have access to additional liquidity by posting their collectibles from clients as collateral. In turn, lenders can use the extra cash, which could be in peso, dollar, or yen, to lend more to their corporate or retail clients and service unexpected withdrawals.

“With the BSP shedding 200 basis points (bps) last year, it is clear that banks were amply supplied with liquidity,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail.

He said rediscount loans could rise once the central bank starts hiking rates.

“We may see some tightening toward the end of this year or early 2022,” Mr. Asuncion said.

The BSP last year cut benchmark interest rates by a cumulative 200 bps to bring yields on its overnight reverse repurchase, lending, and deposit facilities to record lows of 2%, 2.5%, and 1.5%, respectively.

The central bank had said its aggressive easing measures were meant to support the virus-stricken economy.

BSP Governor Benjamin E. Diokno earlier said the policy adjustments have infused about P2 trillion in liquidity into the financial system.

Meanwhile, the applicable rate for peso rediscount loans in January is set at 2.5% — which is the current lending rate — regardless of maturity.

The dollar- and yen-denominated credit line will be priced at 2.23838% and 1.9175%, respectively, regardless o-f maturity. — L.W.T. Noble

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

A Saudi flag flutters atop Saudi Arabia’s consulate in Istanbul, Turkey Oct. 20, 2018. — REUTERS/HUSEYIN ALDEMIR/FILE PHOTO RIYADH — Saudi Arabia’s crown prince...

Economy

IN FEB. 2019, Facebook, Inc. set up a test account in India to determine how its own algorithms affect what people see in one...

Economy

CHINA’S economy risks slowing faster than investors realize as President Xi Jinping’s push to cut its reliance on real estate and regulate sectors from...

Economy

Faced with a high level of competition in an era of streaming services, content providers must stay ahead by developing a strong user experience...

Economy

The Philippines remains under a “gray” list of countries under increased monitoring for money laundering and terrorism financing risks, despite some progress in implementing...

Investing

A Brewdog promotion which said customers could win “solid gold” beer cans was misleading, the advertising watchdog has found. The Scottish brewer offered shoppers...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

Pfizer Inc on Wednesday raised its 2021 sales forecast for its COVID-19 vaccine by 29% to $33.5 billion, and said it believes people will...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!