BSP Advances Sunset Period for TBs, RBs and CBs

The Bangko Sentral ng Pilipinas (BSP) announced today that the Monetary Board has approved the termination of the sunset provision in favor of thrift banks (TBs), rural banks (RBs) and cooperative banks (CBs), resulting in a unified rediscounting window for all types of banks.

In 2013, reforms were made to bring the BSP Peso rediscounting policies in line with its lender-of-last-resort function through Circular No. 806 dated 15 August 2013. The Circular established, for a prescribed period, two separate rediscounting windows (RWs), namely: RW I for universal and commercial banks, and RW II for TBs, RBs and CBs. TBs were given a sunset period of five years or until 15 November 2018 while RBs and CBs were given 10 years or until 15 November 2023 to access RW II at the then existing terms. These banks were expected to use the transition period to improve their deposit mobilization capacities and increase the utilization of other funding sources, thus reducing their dependence on BSP funding over time.

The Monetary Board noted that based on the statistical data of TBs, RBs and CBs, these banks are no longer dependent on BSP funds, warranting the shortening of the sunset period. This was validated by the results of a conducted survey of rediscounting banks and through consultative meetings with banking groups.

Following the termination of the sunset provision, all banks shall access a unified rediscounting window which shall adopt the terms under RW I. Accordingly, this will have the following changes affecting TBs, RBs and CBs:

1) Adjustment of rediscount rates as follows:

sunset provision

1 O/N RRP and O/N lending rates are 3.0 percent and 3.5 percent, respectively.


2) Shortening of maximum loan maturity from 360 days to 180 days.

The BSP will issue a Circular implementing the amendments to the rediscounting policies which shall take effect 15 calendar days following its publication either in the Official Gazette or in a newspaper of general circulation.