the flexibility to implement these irc - related reforms at this time. the successful implementation over time of the irc system will also allow for recalibrations in other monetary policy tools, including possible adjustments in reserve requirements in line with international norms. ladies and gentlemen, i have often said that while our mandate remains the same, the environment in which we operate in remains dynamic and continues to evolve. we therefore continue to rise up to the challenge of rethinking the status quo and finding ways to further improve as a central monetary authority – a central monetary authority that promotes stability and fosters sustained economic growth. as we strive to constantly be better and to build on our strengths, we hope to be able to count on the continuing support of the banking and financial sectors. indeed, for our irc system to succeed, it is important that we move forward together and cooperate in making it work as envisioned. i am pleased therefore that we have with us today the bankers association of the philippines represented by its president nestor tan ; the money market association of the philippines with its president raul martin pedro ; the investment house association of the philippines with its president manuel tordesillas ; the trust officers association of the philippines with its president angel maria pacis ; the aci philippines, the financial markets association represented by its treasurer anthony paul yap ; and the chamber of thrift banks with its president rommel latinazo. i would challenge our industry associations to undertake your day - to - day liquidity management more actively, to strive for greater participation in the interbank market and reduce reliance on central bank facilities, and to continue efforts towards establishing appropriate price benchmarks for financial markets. finally, we also thank the media for their continuing coverage that keeps us connected with our stakeholders and our people. maraming salamat sa inyo. mabuhay ang ating mahal na bansang pilipinas! mabuhay po tayong lahat! bis central bankers ’ speeches

amando m tetangco, jr : strengthening the monetary transmission mechanism through the bsp ’ s interest rate corridor system speech by mr amando m tetangco, jr, governor of bangko sentral ng pilipinas ( bsp, the central bank of the philippines ), at the moa signing for the bsp ’ s interest rate corridor system, manila, 16 may 2016. * * * magandang hapon sa inyong lahat! i am pleased to see all of you here at the signing of the memorandum of agreement on the monetary operations system ( mos ). today ’ s simple signing ceremony is a milestone that ushers in a new framework for the way that the bsp conducts its monetary operations. since we first broached the idea to the public in 2013, we carefully laid down the groundwork for the adoption of the interest rate corridor or the irc this year. this included drawing up an operational framework through consultations with the banking community ; establishing the mos as an it platform for auction - based monetary operations ; and developing a model for domestic liquidity forecasting to guide our daily monetary operations. in other words, years of preparation culminate in today ’ s moa signing. and in a few weeks ’ time, on june 3, 2016, 1 we will bring these operational elements together to implement the irc system. our motivation is simple. we would like to further strengthen the relationship between the bsp ’ s policy rates and money market interest rates. this, in turn, will enable the bsp to better manage inflation and promote long - term sustainable growth. by providing an operating framework for money market rates to move more closely with the bsp ’ s policy rate, the irc will help enhance the link between the stance of bsp monetary policy and the real economy. in order to establish the interest rate corridor, the bsp interest rates will be re - calibrated as follows : first, the current overnight rp rate of 6. 0 percent will be reduced to 3. 5 percent when the rp window is converted to the overnight lending facility. second, the overnight rrp rate of 4. 0 percent will be adjusted to 3. 0 percent. and third, the sda rate of 2. 5 percent will be kept steady when it is transformed to the overnight deposit facility. the new configuration effectively sets a ± 50 basis - point width around the bsp ’ s policy interest rate. while