The Bangko Sentral ng Pilipinas (BSP) said Tuesday it will enhance its rediscounting facility, adding advances against government and BSP securities and helping align its credit operations with global best practices.
Under the change, the rediscounting facility will be replaced by the Discount Window Facility (DWF), which will begin operations when BSP Circular No. 1202 dated Sept. 24, 2024 takes effect two months after its publication.
The BSP currently rediscounts loans, accepting government securities (GS) as additional collateral. Under the DWF, banks will be able to directly offer GS and BSP securities in exchange for advances.
This gives the BSP an additional mode to influence credit volume consistent with its objectives of maintaining price and financial stability, it said in a statement.
DWF lines approved under the new circular can be tapped by banks either by rediscounting loans or by offering their GS and BSP securities for advances.
Banks can also tap existing rediscounting lines until these lines expire a year after their effectivity, but only for rediscounting loans.
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