BANGKO SENTRAL TO LAUNCH SECURITIES IN Q3
THE Bangko Sentral ng Pilipinas’ ( BSP) own securities are set to be launched in the third quarter after it signed with the Bureau of the Treasury (BTr) an agreement that would allow these to be auctioned off seamlessly.
BSP Governor Benjamin Diokno and National Treasurer Rosalia de Leon signed the memorandum of agreement to link the central bank’s
Monetary Operations System ( MOS) with the BTr’s National Registry of Scripless Securities ( NRoSS) on Wednesday.
Diokno said the signing of the deal marked an important step toward the actual issuance of the Bangko Sentral’s own securities for open-market operations.
“The connectivity of the MOS and the NRoSS is the main infrastructure that would allow the issuance to be possible and would make the features of the BSP Securities negotiable and attractive to the market,” he explained.
With the MOS-NRoSS link, he added, the securities can be auctioned, registered and transferred seamlessly in the primary and secondary markets.
But before the securities can be issued, Diokno said there were three things that needed to be accomplished.
First, the central bank need to ensure that trading of the securities in the secondary market can be facilitated; second, the BSP will conduct end- toend systems testing to ensure that the entire process from auction to trading in the secondary market works smoothly; and third, the central bank will embark on coordination with its eligible counterparties for market sounding activities.
“That said, the BSP is looking forward to its first issuance of the BSP securities this quarter,” the central bank chief said.
Finance Secretary Carlos Dominguez 3rd, who also attended the signing ceremony, said the agreement would ensure proper coordination between the BSP and BTr, which was important in achieving a finely-tuned liquidity process.
“By being able to issue debt securities, the BSP is empowered with a more targeted approach to achieving desired monetary policy outcomes. Should there be excess structural liquidity in the financial system, the BSP will be able to respond more effectively,” he added.