The strong response of banks to the Electronic Rediscounting System (eRediscounting), which was unveiled and launched by the Bangko Sentral ng Pilipinas (BSP) last 13 December 2006, resulted in an increase in its rediscounting loan portfolio by P528 million.
The BSP reported that since the launching of the system last 13 December 2006, twenty-two banks have already participated in the eRediscounting, consisting of six universal and commercial banks, six thrift banks and ten rural banks. In terms of credit delivery, P457 million, P67 million and P4 million rediscounting loans were released to Luzon (including NCR), Visayas and Mindanao banks, respectively.
BSP Governor Amando M. Tetangco, Jr. said he was pleased with this development and the positive response from the banking industry to the new lending system of the BSP. He said that the e-Rediscounting system represents a milestone in servicing the liquidity needs of the banking community and the credit requirements of the public in an expanding economy. This improvement in refinancing technology is envisioned to translate to an improved credit access for exporters and small, medium and micro-enterprises, particularly those in the countryside. He said he expects more banks will be participating in the new lending system, especially the banks which are located in the far-flung areas of the country.
Rediscounting is a credit facility of the BSP to help banks liquefy their position by refinancing the loan they extend to their clients. The facility allows banks to convert their receivables into ready cash, putting them in a position to generate more funds to re-lend to different economic sectors, such as the micro, small and medium enterprises, which comprises about 90 percent of the country’s business sector. The new lending system, the eRediscounting, is capable of real-time delivery of credit to banks, accelerating the turnover of money available for re-lending to these sectors.
By the middle of next year, the BSP expects all banks to conduct their rediscounting transactions using the eRediscounting system.