Amando M Tetangco, Jr: Moving forward with financial infrastructure
integration through the BSP's Reverse Repurchase E-Trading System
Speech by Mr Amando M Tetangco, Jr, Governor of Bangko Sentral ng Pilipinas (BSP, the
central bank of the Philippines), at the signing ceremony of the BSP's Reverse Repurchase
E-Trading System, Manila, 30 January 2015.
* * *
I am pleased to see that the partnership between the Bangko Sentral ng Pilipinas and the
banking industry continues to grow, strengthen and deepen. Today, the signing of a
Memorandum of Understanding for the BSP's Reverse Repurchase Electronic Trading
System marks yet another milestone in our efforts to promote financial market operations
underpinned by strong and secure infrastructure and well-designed rules.
Over the years, the BSP has launched initiatives to address the growing needs of its
stakeholders and to adapt to the changing times. These include the implementation of
realtime gross settlement system which BSP operates today as the PhilPASS, the Intraday
Liquidity Facility, the BSP e-Rediscounting System, and the REMIT System for OFW
remittances, just to name a few.
Ladies and gentlemen. These initiatives form important building blocks towards a domestic
financial market infrastructure that efficiently and effectively responds to the needs of the real
sector.
With this goal in mind, our latest initiative is the RRP E-trading system, a web-based
electronic platform... where overnight and term RRP agreements between financial
institutions and the BSP's Treasury Department may be transacted and settled.
With built-in security access procedures, the new E system will replace the manual queuing
of the RRP trade orders that are posted via a combination of telephone and stand-alone
trading platforms, e.g., Reuters or Bloomberg. It will also eliminate the unintended
consequence of manually collating transactions from different order sources.
Another benefit that users of the e-trading system will enjoy is straight through processing
where reporting of interbank call loan transactions will be done electronically. In sum,
therefore, the system should heighten the security of the full dealing, settlement and
reporting cycle of RRP transactions.
But more than the benefits of automation, the creation of this system opens up for the BSP
new horizons for enhancing the way it conducts open market operations or OMO. This
electronic trading system provides the BSP the flexibility to use different methods to allocate
RRPs to participating banks, including possibly an auction system. In turn, the option to
auction RRPs will give the BSP the means to implement a full interest rate corridor for OMO
in the future. Presently, our OMO is conducted with the RP as the ceiling and the SDA as the
floor.
The electronic reporting of transactions will also expedite the calculations for another
important initiative in progress - the OIS, which is a determinative component in completing
the benchmark yield curve. We can see, therefore, some interesting times ahead.
We look forward to continue working closely with the leaders of our financial system in
building financial market infrastructure and systems that are safe, secure and responsive to
its stakeholders. Thank you for your continuing support.
Finally, let us congratulate the BSP's Treasury Department under the leadership of Assistant
Governor Winnie Santiago who worked with the BSP's Payments System Office, Information
Technology Sub-Sector, and Legal Office in setting up this trading platform.
We look forward to more joint undertakings that will continue to move us forward toward a
better, bigger and stronger financial market that will keep our economy growing and
increasingly inclusive.
Thank you all and Mabuhay!