Jun 122013

MANILA, Philippines – Banks borrowed fewer funds from the Bangko Sentral ng Pilipinas (BSP) in the first five months, highlighting the healthy state of the local banking industry.

Peso loans granted to banks under the central bank’s rediscount facility totaled P16.605 billion from January to May, 11.9 percent lower from the same period last year, data showed.

Dollar credit, granted under the exporters dollar and yen rediscount facility, likewise dipped 6.8 percent to $61.5 million from $66 million a year ago. A total of 26 exporters benefited from the credit.

No yen credit was extended during the period.

The central bank’s rediscount window allows banks to borrow extra funds from the BSP charged with interest pegged against the BSP’s overnight borrowing rate. The current rate is at a record-low of 3.5 percent.

The BSP has long highlighted the strength and health of the local banking industry, with sufficient capital and liquidity as well as enough provisioning against potential losses, to lend more.

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According to latest BSP data, bank resources hit P8.229 trillion as of February, an increase of 9.09 percent from the previous year’s P7.544 trillion. The latest figure was also up from end-January’s P8.225 trillion.

The rediscount facility, it has said, was meant to provide additional funding for banks to lend out to specific industries such as the export and agriculture sectors.

Of the total peso credit lent until May, 86.6 percent went to commercial activities, while 2.1 percent went to the agriculture and industry sectors.

The remaining 11.1 percent went to capital expenditures (4.2 percent), permanent working capital (0.4 percent), housing (0.1 percent) and other services (6.6 percent).

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