Eligible Papers and Loan Value
- Eligible papers include agricultural production credits, cottage and small industries credits, general-purpose working capital financing, and other short-term credits.
- Standard loan value for rediscounting: 80% of face value.
- Exception: Export credits have a loan value of 100% of face value.
Rediscount Rate
- A uniform rediscount rate of 14.0% per annum is prescribed for eligible papers under the rediscount facility.
Lending Rates and Spread Monitoring
- Banks have no imposed ceiling on the lending rates they may charge on rediscounted papers.
- The spreads (difference between the rediscount rate and lending rates charged) are subject to close monitoring by the Central Bank.
- Monitoring aims to ensure spreads are consistent with prevailing market rates and prevent excessive markups.
Supersession of Previous Circulars
- Any provisions of existing Circulars inconsistent with these amendments are deemed superseded by this Circular.
Effectivity and Authority
- The resolution was adopted by the Monetary Board under Resolution No. 1141 dated October 22, 1990.
- The Circular was issued on October 30, 1990, and signed by Governor Jose L. Cuisia, Jr.
- Central Bank holds regulatory authority over rediscounting rates and procedures under these provisions.