MB allows trust entities access to BSP securities in secondary market

The Monetary Board (MB) approved the expansion of the set of eligible participants for Bangko Sentral ng Pilipinas (BSP) Securities in the secondary market to trust entities, effective Dec 10 2021.

A broader secondary market participation in the BSP Securities is in line with the BSP’s continued efforts to strengthen the effectiveness of its market-based instruments for monetary operations.

In addition, the MB has approved the inclusion of digital banks as eligible participants in the BSP’s monetary operations as part of its digital banking framework, effective Dec 10, with the aim of further improving the transmission of monetary policy.

Digital banks will be provided access to the reverse repurchase (RRP) facility, overnight lending facility (OLF), overnight deposit facility (ODF), term deposit facility (TDF), and BSP Securities facility (BSP-SF) for their day-to-day liquidity management needs.

The expanded list of eligible participants is part of the operational refinements to the Interest Rate Corridor (IRC) framework to support the implementation of monetary policy by providing greater scope in managing liquidity in the financial system.

The BSP will continue to review the various aspects of its issuance of BSP Securities to enhance monetary policy transmission as well as foster the development of the money market through better price discovery.