The EDYRF rates are based on the 90-day London Inter-Bank Offered Rate plus a spread depending on the term of the loan.
Meanwhile, the applicable rediscount rate for loans under the Peso Rediscount Facility remains at 3.25 percent, regardless of loan maturity (i.e., 1-180 days). As approved by the Monetary Board (MB) in its meeting on 14 May 2020, the temporary reduction of the term spread on Peso rediscounting loans relative to the overnight lending rate to zero has been extended until 17 July 2020, subject to further extension as may be approved by the MB.
Under the Peso Rediscount1 Facility, total availments2 covering the period of 01 January to 31 May 2020 remains at ₱20.700 billion. The total availments represent borrowings against banks’ credits on transactions related to Commercial and Other Credits. Other Credits, which comprise of 76.53 percent of the total rediscounting loans, pertain to bank loans for Capital Asset Expenditures (62.66 percent) and Permanent Working Capital (13.87 percent). On the other hand, Commercial Credits at 23.47 percent of total rediscounting loans pertain to bank loans for Importation (14.20 percent) and Trading (9.27 percent) of goods.
There was no availment under the BSP Rediscount Facilities for the month ending 31 May 2020.
1 Rediscounting is a BSP credit facility extended to qualified banks with active rediscounting lines to meet their temporary liquidity needs by refinancing the loans they extend to their clients using the eligible papers of its end-user borrowers. These eligible papers include credit instruments such as promissory notes, drafts or bills of exchange of the following nature: a) Commercial Credits – resulting from the importation, exportation, purchase, sale, local transportation or storage of non-perishable and insured goods or products in authorized bonded warehouses or in other places approved by the MB; b) Production Credits – used for production or processing of agricultural, animal, mineral, or industrial products; or c) Other Credits – special credit instruments such as but not limited to microfinance, housing loans, services, agricultural loans with long gestation period, and medium and long-term loans.
2 Rediscounting availments are classified by type of underlying credit (i.e. Commercial, Production and Other Credits) based on the eligible papers offered by banks as collateral. The BSP does not allocate credits on specific sectors nor engage in development banking or financing in accordance with Section 128 of Republic Act (R.A.) No. 7653, as amended by R.A. No. 11211, otherwise known as “The New Central Bank Act”.
Source: Bangko Sentral ng Pilipinas (BSP)