BSP REDISCOUNT RATE SET AT ZERO

The Monetary Board, policy making body of the Bangko Sentral ng Pilipinas ,has extended its zero rate interest for peso rediscounting loans relative to overnight lending rate by another 75 calendar days or up to September 30, 2020.

This MB extension is aimed at providing the needed liquidity to banks for purposes of maintaining price and financial stability amidst the Coronavirus Disease 2019 pandemic in the Philippines. 

Also, the MB approved the reduction of the spread on United States (US) Dollar and Japanese Yen rediscounting loans, thereby reducing the applicable rediscount rates to the 90-day London Interbank Offered Rate plus 200 basis points, regardless of maturity (i.e., 1-360 days), until 30 September 2020, subject to further extension as may be approved by the MB.

As such, 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 July 2020 have been set at 2.30788 percent for US Dollar and 1.95617 percent for Japanese Yen, regardless of loan maturity (i.e., 1-360 days).

For the period covering 01 January to 30 June 2020, total availments1  under the Peso Rediscount 2 Facility amounted to ₱20.7 billion.

These availments represent borrowings against banks’ credits on transactions related to Commercial and Other Credits. Other Credits, which comprise 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 are 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 EDYRF during the 1st semester ending 30 June 2020.

The MB’s decision on the BSP’s rediscount rates is still in line with its accommodative stance to further ease the cost of borrowing and ensure ample credit and liquidity in the financial system as the economy transitions toward recovery