Extension of Temporary Measures Implemented in the Bangko Sentral ng Pilipinas’ Rediscounting Facility

BANGKO SENTRAL NG PILIPINAS OFFICE OF THE GOVERNOR MEMORANDUM NO. M-2O22-92I To All Concerned Banks Subject : Extension of Temporary Measures lmplemented in the Bang ko Sentral ng Pilipinas'Rediscounting Facility The Monetary Board (MB), in its Resolution No. 4O5 dated 25 March 2022, approved the final extension of the temporary measures implemented in the Bangko Sentral ng Pilipinas'(BSP) rediscounting facility until 30 June 2022, as follows: l. Reduction of the term spread on Peso rediscounting loans to zero, thereby equating the Peso rediscount rate to the BSP's Overnight Lending Rate, regardless of maturity (i.e.,I to I8O days); and 2. Reduction of the term spread on rediscounting loans under the Exporters' Dollar and Yen Flediscount Facility (EDYRF), thereby reducing the applicable United States Dollar (USD) and Japanese Yen (JPY) rediscount rates to the 9O-day London Interbank Offered Rates, or in their absence, an applicable benchmark rate, plus risk premium, regardless of maturily (i.e., I to 360 days). The BSP observed that banks have more than adequate liquidity to meet their requirements given that there have been no availments of the rediscounting facif ity as of 25 March 2022. Given the improving domestic liquidity and credit conditions, the temporary measure on the acceptance for rediscounting with the BSP under the EDYRF of the USD- and JPY-denominated credit instruments related to enterprises allowed to operate during the enhanced community quarantine of Luzon, as provided in the Department of Trade and Industry Memorandum Circular No. 2O-O8, shall be effective until 3l March 2o22 only. As the BSP begins to observe indications of a durable economic recovery, we continue to carefully develop our plans for the eventual withdrawal of the extraordinary liquiditlr measures we deployed in response to the pandemic. The BSP will ensure that its policy instruments remain appropriately calibrated to ensure sustainable and non-inflationary economic growth, in keeping with our price and financial stability mandates. For guidance. c (,' BENJAMIN E. DIOKNO Governor 6 tLMarch 2o22