Rediscounting Line Facility for Financial Institutions

The Rediscounting Line Facility for Financial Institutions is a credit facility to supplement or augment funds needed by wholesale borrowers, where availments on the rediscounting line are made against promissory notes of sub-borrowers. It includes not only those project/ business-based enterprises but also those for eligible salary based general purpose consumption loans.

Eligible Borrowers

• • Financial Institutions (FIs)
    • Domestic Banks (UKB, KB, Thrift, Rural and Cooperative banks)
    • Non-Bank Financial Institutions (i.e. Cooperatives, Non-Government Institutions (NGOs), Finance and Leasing Companies, Associations, Microfinance Institutions, etc.)

Eligible Rediscounting Projects/Purposes

• 1. Eligible Sub-Promissory Notes of:
     1. Micro, Small and Medium Enterprises
     2. Small farmers and fishers, agrarian reform beneficiaries
     3. Overseas Filipino Workers
     4. Salaried Personnel
  2. Eligible Sub-Loan Purpose
     1. Retail and Wholesale Trading
     2. Agribusiness – crop, poultry, livestock, fishery/aquaculture for production, processing plantation, marketing, trading, purchase of agri-machinery and equipment
     3. Service oriented projects- includes transportation and heavy equipment, tourism oriented projects (i.e. hotels, restaurants, travel agencies), food processing, warehousing, post-harvest facilities, refrigeration, slaughter houses, utilities, etc.
     4. Property development – includes construction of building facilities, housing projects, etc.
     5. Salary-Based General – Purpose consumption loans (as defined under BSP Circular 886 s. of 2015)

Loan Amount

Up to 85% of the current outstanding principal balance of the sub-PNs being rediscounted

Loan Tenor

• 1. Short Term Rediscounting Line
     • Via a maximum of 360-day PN
  2. Term Loan Rediscounting Line
     • Based on the maturity of the sub-borrower’s PN rediscounted but not to exceed five (5 ) years
  3. Salary Based General-Purpose Consumption Loans
     • Up to five (5) years provided that it shall not go beyond the maturity of the sub-PNs rediscounted

Interest

Prevailing Market Rate

Collateral Security

Any or combination of the following:

1. Assignment of sub-borrowers’ PNs and underlying collaterals*, if any
2. Assignment of Insurance/Surety/Guarantee coverage acceptable to DBP
3. Registered Real Estate Mortgage
4. Registered Chattel Mortgage on machinery & equipment/transportation equipment/livestock
5. Continuing Suretyship, JSS or Co-makership
6. Hold-out deposit
7. Other security arrangements acceptable to DBP.

Documentary Requirements

• • Pre-approval Requirements:

1. 1. 1. Letter of Application
      2. Board Resolution duly signed by the Board of Directors or Board of Trustees (whichever is applicable) or duly notarized Secretary’s Certificate authorizing the FI to borrow funds, negotiate and enter into agreement with the Bank and designating at least two (2) officers of the FI authorized to sign, endorse loan documents, Deed of Assignments, notes, and other documents pertaining to the loan obtained from DBP.
      3. List of Incumbent Members of the Board of Directors/ Trustees and principal officers indicating therein their respective educational attainment and work experience as of recent date;
      4. List of existing principal shareholders and their stockholdings (with 10%) or more of total shares;
      5. Audited Financial Statements (balance and Income Statements) for the past three (3) years and latest interim FS, which should not be more than six (6) months old;
      6. Brief Company Profile;
      7. Articles of Incorporation/ Corporation and By-laws including amendments thereto, if any;
      8. Certificate of Registration with SEC and Certificate of Authority to Operate from the BSP (for new applicant only);
      9. For projects involving constructions: Cost Estimates, Plans and Specifications, Bill of Materials and Work Program/ Schedules;
      10. For Rural banks, copy of year-end and latest quarterly Risk Based Capital Adequacy Ratio (RBCAR) Report as submitted to BSP;
      11. Copy of Updated Income Tax Return (ITR), duly stamped as received by the Bureau of Internal Revenue, together with the supporting financial statements, as applicable (in accordance with BSP Circular No. 855, s. of 2014).
      12. The borrower shall execute a data privacy consent form.

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For inquiries, feel free to contact:

Aaron Ashley Diaz
Program Development and Management II
(02) 818-9511 local 2330
aaddiaz@dbp.ph