In accordance with the Monetary Board (MB) approval in July 2020 on the extension of the temporary reduction of the spread on Peso rediscounting loans as well as the temporary reduction on the spread on US Dollar (USD) and Japanese Yen (JPY) rediscounting loans until 30 September 2020, the applicable BSP rediscount rate for loans under the Peso Rediscount Facility remains at 2.75 percent, regardless of loan maturity (i.e., 1-180 days), while rediscount rates for loans under the Exporters’ Dollar and Yen Rediscount Facility (EDYRF) for the month of August 2020 have been set at 2.24875 percent for USD and 1.94483 percent for JPY, regardless of loan maturity (i.e., 1-360 days).
For the period covering 01 January to 31 July 2020, total availments1 under the Peso Rediscount2 Facility remains at ₱20.7 billion as there was no availment in July 2020. The existing availments represent previous months’ 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 (62.67 percent) and permanent working capital (13.86 percent). Meanwhile, Commercial Credits which is 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 also no availment under EDYRF as of 31 July 2020.
1 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”.
2 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.
Source: Bangko Sentral ng Pilipinas (BSP)