601 MONETARY OPERATIONS
a. The Bangko Sentral may buy and sell in the open market for its own account:
(1) Evidences of indebtedness issued directly by the Government of the Philippines or its political subdivisions; and
(2) Evidences of indebtedness issued by government instrumentalities and fully guaranteed by the Government.
b. Outright purchases and sales of government securities shall be effected at prevailing market prices.
c. Repo agreements shall be open to banks (except RBs), QBs, and accredited government securities dealers and shall be made under the terms provided for under this Section on Repurchase agreements with Bangko Sentral and the following:
(1) The repo agreement may be paid at any time before maturity, subject to mutual agreement of both parties;
(2) In the event the securities covered by the repo agreement are not repurchased by the issuer of such agreement, the same may be sold in the open market or transferred to the Bangko Sentral portfolio; and
(3) Should an issuer of a repo agreement become no longer qualified as such, its outstanding repo agreement shall immediately become due and payable. If settlement of the amount due is not made within three (3) days from the date of its disqualification, the Bangko Sentral shall proceed to collect said amount in accordance with the preceding paragraph.
d. Reverse repo agreements covering the sale of portion of the security holdings of the Bangko Sentral portfolio may be made under the terms provided for under this Section on Reverse repurchase agreements with Bangko Sentral.
e. The purchase and sale of government securities by the National Treasury and government-owned or -controlled corporations shall be made only with (a) the Bangko Sentral; (b) the DBP, the LBP, the SSS, the GSIS, the Al-Amanah Islamic Investment Bank of the Philippines and banks that are wholly-owned or -controlled by these institutions; and (c) the Philippine Veterans Bank. Transactions shall be done with the bank proper and not through its trust department.
a. Repo agreements may be entered into with the Bangko Sentral, subject to the following terms and conditions:
(1) Rate. The rates on repo transactions shall be determined by auction, based on guidelines as prescribed by the Bangko Sentral.
(2) Term. The tenor of the repo agreement shall be set by the Bangko Sentral.
(3) Security. Only direct obligations of the National Government and its instrumentalities and political subdivisions, which are fully guaranteed by the Government, with a remaining maturity of at least six (6) days and longer than the tenor of the Repo Agreement and which are freely negotiable, unencumbered, and regularly serviced, shall be eligible as underlying instruments for repo agreements, subject to the collateral requirement prescribed by the Bangko Sentral.
(4) Delivery. Delivery of the underlying instruments shall be made to the Bangko Sentral at the prescribed time based on guidelines issued by the Bangko Sentral.
(5) At the maturity of the repo agreement, the Bangko Sentral Financial Market Operations Sub-sector shall return the underlying instruments to the issuer of such agreement.
b. US dollar (USD) denominated repo agreement facility may likewise be entered into with the Bangko Sentral, subject to the following terms and conditions, and as may be provided under the repo agreement facility:
(1) Eligible borrowers. The USD-denominated repo facility shall only be available to banks with legitimate foreign currency denominated funding needs as may be provided under the repo facility: Provided, That the borrowing shall be for the account of the applicant bank and shall not be used to fund liquidity requirements of foreign branches, affiliates, or subsidiaries.
(2) Security. Only USD-denominated obligations of the National Government of the Republic of the Philippines shall be eligible as collateral.
(3) The guidelines on the availment of USD repo agreement with the Bangko Sentral are shown in Appendix 89.
(1) Termination of eligibility and pre-termination of any outstanding balance through repayment and/or sale of the collateral;
(2) Fine of up to P30,000 per transaction per day of violation reckoned from the time the violation was committed up to the date it is corrected;
(3) Suspension of interbank clearing privileges/immediate exclusion from clearing;
(4) Suspension of access to Bangko Sentral rediscounting facilities;
(5) Suspension of lending or foreign exchange operations or authority to accept new deposits or make new investments;
(6) Revocation of authority to perform trust operations;
(7) Revocation of quasi-banking license;
(8) Suspension for 120 days without pay of the officers and/or directors responsible for the violation; and
(9) Other sanctions as may be provided by law.
a. Rate. The interest rate on the RRP facility shall be set by the Bangko Sentral in accordance with its monetary policy decision making.
b. Term. Tenors shall be set at a minimum of one (1) day (overnight) and a maximum of 364 days, or as determined by the Bangko Sentral.
c. Auction schedule. RRP auctions will be held regularly based on a schedule prescribed by the Bangko Sentral.
d. Volume. The auction size will be determined by the Bangko Sentral based on its assessment of liquidity conditions.
e. Eligible security. The underlying securities shall consist of securities representing obligations of the National Government. Such securities shall be valued at 100%. The Bangko Sentral shall prescribe the rules for the constructive delivery of securities.
f. Access to the RRP facility shall be governed by guidelines issued by the Bangko Sentral.
(1) All overnight RRPs with the Bangko Sentral shall be subject to the twenty percent (20%) FWT and five percent (5%) Gross Receipts Tax (GRT) in the same manner as term RRPs, which tax is deducted on each maturity date and remitted to the BIR. These taxes shall be automatically withheld; and
(2) Concerned banks shall issue the corresponding debit authority to the Bangko Sentral to cover the twenty percent (20%) FWT on their RRPs with the Bangko Sentral.
a. Rate. The interest rate on borrowings from the OLF shall be set by the Bangko Sentral in relation to the policy interest rate.
b. Term. Tenor shall be for one (1) day only.
c. Volume. Open volume, limited only by the eligible collateral offered by the availing counterparties.
d. Eligible collateral. Only direct obligations of the National Government or of its instrumentalities and political subdivisions which are fully guaranteed by the Government, with a remaining maturity of not less than six (6) days and which are freely negotiable and are unencumbered, shall be eligible as collateral. The Bangko Sentral shall prescribe rules for the delivery of collateral.
e. Operating hours. The OLF is available on demand to eligible counterparties during trading hours as prescribed by the Bangko Sentral.
a. Rate. The interest rate on the overnight deposit facility shall be set by the Bangko Sentral in relation to the policy interest rate.
b. Term. Tenor shall be one (1) day only.
c. Volume. No limit.
d. Operating hours. The ODF is available on demand to eligible counterparties during trading hours as prescribed by the Bangko Sentral.
e. Access to the ODF shall be governed by guidelines issued by the Bangko Sentral.
(1) All overnight deposit transactions with the Bangko Sentral shall be subject to the twenty percent (20%) FWT and the five percent (5%) GRT which tax is deducted on each maturity date and remitted to the BIR; and
(2) The Bangko Sentral Financial Market Operations Sub-sector shall automatically withhold the twenty percent (20%) FWT and the five percent (5%) GRT on the overnight deposit of eligible counterparties with the Bangko Sentral.
a. Rate. The interest rates shall be determined by auction, based on guidelines as prescribed by the Bangko Sentral.
b. Term. The tenor of term deposits shall be set by the Bangko Sentral.
c. Auction Schedule. TDF auctions will be held on a weekly basis or as determined by the Bangko Sentral.
d. Volume. The auction size will be determined by the Bangko Sentral and announced with an appropriate lead time ahead of the auction date.
e. Placements in the TDF shall be governed by guidelines issued by the Financial Market Operations Sub-sector of the Bangko Sentral.
(1) All term deposit transactions with the Bangko Sentral shall be subject to the twenty percent (20%) FWT and the five percent (5%) GRT which tax is deducted on each maturity date and remitted to the BIR; and
(2) The Bangko Sentral Financial Market Operations Sub-sector shall automatically withhold the twenty percent (20%) FWT and the five percent (5%) GRT on the term deposit of eligible counterparties with the Bangko Sentral.
(Circular No. 995 dated 5 February 2018, 961 dated 02 June 2017, M-2016-016 dated 18 November 2016 , Circular Nos. 921 dated 22 August 2016, and 913 dated 02 June 2016)
Footnotes
- The Monetary Board, in its Resolution No. 1945 dated 27 October 2016 approved the discontinuance of access of trust entities to the Bangko Sentral deposit facilities. Trust entities shall no longer have outstanding placement in the ODF and TDF by 30 June 2017.
- The Monetary Board, in its Resolution No. 1945 dated 27 October 2016 approved the discontinuance of access of trust entities to the Bangko Sentral deposit facilities. Trust entities shall no longer have outstanding placement in the ODF and TDF by 30 June 2017.
- The TDF also refers to the Term Deposit Auction Facility in Participation Agreements and Rules and Regulation pertaining to the Bangko Sentral facilities under the Monetary Operations System.