BTr names top market makers

MANILA, Philippines — The Bureau of the Treasury has named the 10 “market makers” under its Enhanced Government Securities Eligible Dealers (GSED) program as it rolled out the repurchase (repo) market for banks.

Finance Secretary Carlos Dominguez III said the market makers were selected based on their performance in the primary and secondary government security markets.

These include the BDO Unibank Inc. and China Banking Corp. of retail and banking magnate Henry Sy, Ayala-led Bank of the Philippine Islands, Citibank Philippines, government owned- Development Bank of the Philippines and Land Bank of the Philippines, Metropolitan Bank and Trust Co. as well as First Metro Investment Corp. of taipan George Ty, Rizal Commercial Banking Corp. founded by the late tycoon Alfonso Yuchengco and Security Bank Corp.

As market makers, National Treasurer Rosalia de Leon said the GSEDs would have the opportunity to access the Bond Sinking Fund.

“The top privilege will really be the access to the bond sinking fund. That’s the lender of last resort for the security,” De Leon said.

They would also be allowed to participate in second round auctions and market consultations and be given consideration on participation in special issues and liability management activities of the Treasury.

In terms of obligations, De Leon said the GSEDs would have to provide two-way quotes, and should bid during auctions for a minimum volume.

De Leon together with Bangko Sentral Governor Nestor Espenilla Jr., Finance Undersecretary Gil Beltran, Securities and Exchange Commission Chairman Teresita Herbosa led the inaugural repo transaction during the launch of the Government Securities Repo Program.

“In particular, the organized interdealer repo market is expected to boost market liquidity and enhance price discovery as it gives GSEDs the ability to quote two-way prices.  Further, the “deliver-out, true sale basis” feature of this instrument is expected to provide market makers the ability to take positions and provide them greater flexibility in managing their portfolios,” the BSP chief said.