09 October 2017
Manila
Reporter: Drew Nicol

Philippines repo market to launch in November


The central bank of the Philippines will launch its repo market in November as part of a series of “game-changing financial sector reforms,” according to the Bangko Sentral ng Pilipinas’s (BSP’s) new governor.

Speaking at the 6th Annual dbAccess Philippines Conference, governor Nestor Espenilla Jr laid out a roadmap for reform which includes increasing the volume of treasury bills, provide a transparent mechanism covering the issuance of government securities and strengthening regulatory oversight over the repo and fixed income market.

The launch of a repo market was first proposed by Espenilla’s predecessor Amando Tetangco Jr in August 2016.

Espenilla, who has worked within central banks for 36 years, said: “In this invitation, there is the simple but powerful recognition that new leadership does not necessarily mean the exclusion of either one of these possibilities of continuity and change … there is no need to choose one path over the other.”

The Bureau of the Treasury has been sending “report cards” to Government Securities Eligible Dealers (GSEDs) since June highlighting their performance in the primary and secondary markets.

These will serve as basis for future recognition of market makers.

“We have seen performance of GSEDs improve following the release of these report cards and the unveiling of the roadmap, through improved subscriptions, higher participation in pre-auction surveys, and more GSEDs providing indicative bids.”

“Bid submissions show tighter convergence and presence of outliers are now more limited. From a difference between the highest and lowest bids of 190 basis points (bps), spread is now around 25 bps.”

BTr will announce the preliminary market makers and will launch the actual enhanced GSED programme early next year.

“We will follow a coordinated and deliberate sequenced approach to ensure smooth implementation of these reforms,” Espenilla added.

Philippines already boasts an active securities borrowing and lending market, which has been in place since 2006.

The market is bilateral or can be conducted via an intermediary, although it is known to suffer from limited supply.

More news
The latest news from Securities Lending Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Citi and CME Clearing launch collateral DLT platform
18 December 2017 | New York | Reporter: Zsuzsa Szabo
The blockchain software aims to reduce margin cost
South Africa extends code of conduct consultation deadline
18 December 2017 | Pretoria | Reporter: Jenna Lomax
The Registrar of Securities Services has proposed a new code of conduct for a renewed deadline for comment
Dubai Financial Market launches short selling
18 December 2017 | Abu Dhabi | Reporter: Jenna Lomax
Dubai Financial Market has launched a regulated short selling service after gaining approval by the Securities and Commodities Authority
J.P. Morgan and Citi collaborate on truePTS post-trade platform
15 December 2017 | New York | Reporter: Zsuzsa Szabo
The New-York-based startup processes ecosystem for the global $700 trillion derivatives market
SIFMA: US market requires improved CCP access
15 December 2017 | Washington DC | Reporter: Jenna Lomax
The Dodd-Frank Act has increased the need for US firms to have access to non US swaps trading venues and central counterparties, according to paper by FIA and SIFMA
France raises spectre of European financial transactions tax
15 December 2017 | Paris | Reporter: Jenna Lomax
French President Emmanuel Macron and several ministers have dismissed concerns over the negative effect of an EU financial transactions tax on securities lending revenue
Vekaria exits Credit Suisse
14 December 2017 | Dublin | Reporter: Zsuzsa Szabo
Head of Credit Suisse's Dublin branch Manish Vekaria has left the bank