BSP en­hances rules for banks’ bond is­suances

Sun.Star Davao - - BUSINESS -

MANILA -- The Bangko Sen­tral ng Pilip­inas (BSP) re­vised its rules on banks’ bond is­suances to keep them in line with those of the Se­cu­ri­ties and Ex­change Com­mis­sion (SEC) and to ad­dress pol­icy gaps.

In an in­ter­view by jour­nal­ists Fri­day, BSP Gov­er­nor Nestor A. Espe­nilla Jr. said the cen­tral bank has “is­sued the rules that will fa­cil­i­tate banks to is­sue bonds into the mar­ket.”

He ex­plained that bond is­suances will help banks raise cap­i­tal on top of the is­suance of long-term ne­go­tiable cer­tifi­cate of de­posit (LTNCD), a long-term in­stru­ment.

Espe­nilla added that bond is­suances can also be tapped to re­place LTNCDs in the long run.

Banks are al­lowed to is­sue bonds, he said, “but there were gaps in the rules that made it dif­fi­cult (to is­sue).”

This was why the BSP worked with the SEC to clar­ify and sort the rules, and make these in line with the Se­cu­ri­ties Reg­u­la­tion Code (SRC).

“The bot­tom line is like a non-fi­nan­cial, cor­po­rate bond can be is­sued by a bank fol­low­ing ba­si­cally the SEC bonds is­suance rules. We re­moved the seem­ing dis­con­nect,” he said.

The new rules will not af­fect ap­pli­ca­tions for LTNCD is­suance that are al­ready in the pipe­line, the cen­tral bank chief said, cit­ing the large num­ber of LTNCD is­suance lately as banks try to man­age in­ter­est rates risk.

“They are try­ing to lock in long-term money to match their long-term fund­ing,” he said.

Newspapers in English

Newspapers from Philippines

© PressReader. All rights reserved.