Zero demand for rediscount facility in August
The central bank said banks听did not avail of听its听rediscount facility in August听as credit demand听remained weak.听
The听Bangko听Sentral听ng Pilipinas (BSP)听said in a statement Friday听that听in the eight months to August, overall听use听of the facility amounted to听P5.52 million, with loan activity taking place only in听June and July.听
It said there were also no loan听availments听under the Exporters鈥 Dollar and Yen Rediscount Facility (EDYRF) in the听eight months.听
Through the rediscount window, the central bank听allows banks听tap听additional听funds in exchange for security听such as receivables.听
Banks may then use the听pesos, dollars, or yen from the facility to听release more loans to their corporate or retail clients and听service听unexpected withdrawals.听
It is less compelling for banks to tap听the听听rediscount听facility due to muted听demand for loans, and with听the financial system still awash with cash, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said.听
“Various regulatory relief measures听mean that听banks effectively increased their听loanable funds鈥听the liquidity infusion measures, with the objective of encouraging banks to increase their lending activities since the pandemic, also reduced the need for banks to tap the BSP rediscounting facilities,” he added.听
The听BSP听estimates that听bank lending slipped for an eighth consecutive month听in July, down听0.7% from a year听earlier听to P9.137 trillion.听
Lending continued to decline despite the 5.9%听increase in the money supply in June,听with听banks remaining听risk-averse听during the prolonged economic downturn.听
Last year,听the听banks only tapped the rediscount window in March, April, August and September,听availing of听P26.9 billion, down听77.7%听from a year earlier.听
Meanwhile, the EDYRF was听not tapped听last year.听鈥撎Beatrice M.听Laforga听
