The Bangko Sentral ng Pilipinas (BSP) released P146.5 billion worth of loans and advances to the banking industry in the first six months of the year and bulk of these loans are to the Philippine Deposit Insurance Corp. (PDIC) and rediscounted financing.

For the month of June, BSP loans and advances increased by P22.4 billion compared to what was reported in May. Compared to June 2008, the latest amount was 36 percent or P38 billion higher.

The central bank’s total loans to the PDIC amounted to P72.7 billion during the tally period. BSP, under its charter, is disallowed from giving a direct loan to a bank unless it was an emergency loan so all loans including financial assistance are transferred to PDIC. BSP’s rediscounting facility, in the meantime, had disbursed P53 billion as of the end of June. PDIC, under its new law which also raised its deposit insurance to P500,000 from P250,000 per depositor, now has authority to conduct special examinations of banks and to rule if there is systemic risk in case a bank or several bank fails. This authority is independent of the BSP’s Monetary Board.