MANILA – The Monetary Board, the highest policy-making body of the Bangko Sentral ng Pilipinas has terminated the rediscounting widows of thrift banks (TBs), rural banks (RBs), and cooperative banks (CBs) after it noted the lesser need for the facility.
With this, the rediscounting window now has a unified rate of 3.5625 percent for the 90-day facility and 3.6250 percent for the 91-day to 180-day facility.
Previously, the rate of the 1-90 days facility was based on the central bank’s overnight borrowing or reverse repurchase (RRP) facility, which is 3 percent; the 91-180 days is based on the RRP rate plus 0.0625 percent; and the 181-360 days was based on the RRP rate plus 0.1250 percent.
Under the latest MB decision, the 181-360 days facility was also terminated.
The rediscount facility was established in 2013, with universal and commercial banks given a five-year term until 2018; and TBs, RBs and CBs are given a 10-year period or until November 2023, to help the banks improve their deposit mobilization capacities and increase the utilization of other funding sources.
BSP, in a statement, said the Board has noticed that TBs, RBs and CBs are no longer dependent on the facility; thus, the decision to shorten the sunset period extended to them.
“This was validated by the results of a conducted survey of rediscount banks and through consultative meetings with banking groups,” it said.
The central bank on Tuesday reported that availment on the peso-rediscount facility as of May 31, 2017 reached P15 million, 98.5 of which were used for other credits such as housing and permanent working capital while 1.5 percent was tapped for production credits.
Availment in the facility in the first five months this year is lower than the P10.64 billion in the same period in 2016.
