Bangko Sentral ng Pilipinas readies roadmap for  debt issuance
BSP Deputy Governor Diwa Guinigundo said monetary authorities would seek the approval of the Monetary Board to conduct market sounding exercises once the guidelines of Republic Act 11211 or an act amending RA 7653, otherwise known as the new central bank act are issued.
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Bangko Sentral ng Pilipinas readies roadmap for debt issuance
Lawrence Agcaoili (The Philippine Star) - March 9, 2019 - 12:00am

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is finalizing a roadmap containing the types of indebtedness, tenors, and other details as its revised charter authorized the central bank to issue debt instruments.

BSP Deputy Governor Diwa Guinigundo said monetary authorities would seek the approval of the Monetary Board to conduct market sounding exercises once the guidelines of Republic Act 11211 or an act amending RA 7653, otherwise known as the new central bank act are issued.

“We will be conducting market-sounding exercises. We will talk to our stakeholders, meaning the banks, the business community on the more acceptable instruments,” Guinigundo said.

The amended BSP charter removed the condition that the issuance of certificates of indebtedness would be made only in cases of extraordinary movement in price levels.

Monetary operations of the BSP refer to the buying or selling of government securities, lending or borrowing against underlying assets as collateral, acceptance of fixed-term deposits, foreign exchange swaps, and the use of other monetary instruments of the central bank aimed at influencing the underlying demand and supply conditions.

Guinigundo said the BSP’s liquidity absorption facilities include the reverse repurchase, the overnight deposit, the overnight lending, and the term deposits.

These facilities, he said, are being used by the BSP to siphon off excess liquidity in the financial system.

Guinigundo said the issuance of debt papers by the BSP would not compete with the issuance by the national government through the Bureau of the Treasury (BTr) such as Retail Treasury Bonds (RTBs), Treasury Bills (T-bills), and Treasury Bonds (T-bonds).

Earlier, BSP Deputy Governor Maria Almasara Cyd Tuaño-Amador said the amended charter gave the BSP an expanded toolkit as its authority to issue debt papers as part of its operations was restored.

“The central bank wants to have an expanded toolkit, a policy instrument, an arsenal of policy instrument that can be used to fine-tune monetary aggregates in the economy,” Amador said.

BANGKO SENTRAL NG PILIPINAS BUREAU OF THE TREASURY DIWA GUINIGUNDO
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