Loans and Credit Operations

Rediscounting

Rediscounting is a standing credit facility provided by the BSP to help banks meet temporary liquidity needs by refinancing the loans they extend to their clients. Through the facility, the BSP also makes possible the timely delivery of credit to all productive sectors of the economy. Moreover, rediscounting is one of the monetary tools of the BSP to regulate the level of liquidity in the financial system. The BSP’s rediscounting is administered by the Department of Loans and Credit.

You may download the FAQ on Rediscounting here.

Overnight Clearing Line

The BSP also makes available an overnight clearing line (OCL) to rural banks that are members of the Philippine Clearing House Corporation (PCHC) and to thrift banks authorized to participate directly in the clearing house operations of PCHC to cover shortfalls in the banks' demand deposit account with the BSP arising from clearing operations. The OCL shall be equal to at least 5% of the bank's deposit liabilities secured by first-class collaterals.

Emergency Loans

The BSP also extends financial assistance to banking institutions in the form of fully secured liquidity (emergency) loans as a temporary remedial measure to help solvent banks overcome their liquidity problems arising from causes beyond their control, pursuant to Section 84 of R.A. No. 7653. The maximum assistance shall be limited to the amount needed by the applicant bank to overcome the emergency or financial predicament but shall not exceed 50% of its outstanding deposits and provided that any emergency advance should be collateralized by first-class collateral (primarily real estate).