MANILA — The Bangko Sentral ng Pilipinas noted a continuous drop in the use of the rediscounting facility which allowed banks to borrow money from central bank, as long as it is backed by loan receivables.
Data from the BSP showed that at the end of May, total availments of thrift and rural banks amounted to only P179 million.
The figure is lower by 72 percent compared to the P640 million recorded a year ago.
Eighty-five percent of the total availments went to commercial credits, 2.8 percent to production credits and 12.2 percent to other credits consisting of housing (5.3 percent), permanent working capital (3.7 percent) and capital expenditures (3.2 percent).
This shows that there is enough money circulating in the economy despite reports on the slowdown in the country’s domestic liquidity growth.
With loan receivables submitted as collateral, banks can borrow money from BSP’s rediscounting facility, which ensures that the banks will have enough funds to lent to productive sectors of the economy.