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BSP targets to issue bonds by second half

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THE BANGKO SENTRAL ng Pilipinas (BSP) will go ahead with its planned issuance of its own securities in the second half of the year, despite some pre-launch activities being postponed due to the enhanced community quarantine in Luzon.

“The BSP is looking at formally launching the BSP Securities issuance in the second half of 2020, on the assumption that all of the requirements to support the issuance of negotiable BSP Securities are already completed by then, particularly the required IT (information technology) systems,” the central bank said in an emailed response to reporters.

It noted that the connection between the BSP’s Monetary Operations System and the National Registry of Scripless Securities needs to be finished for the issuance of the negotiable BSP securities.

The central bank said they have been doing industry consultations since February on the proposed features of BSP securities.

“[S]ome of the pre-launch activities initially scheduled in Q1 2020, particularly those requiring interactions with other government agencies and counterparties, may have to be pushed back in view of the one-month community quarantine implemented in Luzon,” the BSP said.

“Meanwhile, all other preparatory activities are proceeding as planned,” it added.

Under the New Central Bank Act, the central bank regained its authority to issue its own set of securities, just like the Bureau of the Treasury.

The central bank has an existing term deposit facility (TDF) with weekly auctions which serves as its principal tool to shore up excess funds in the financial system and guide market interest rates.

Deputy Governor Francisco G. Dakila, Jr. has said they are still assessing the tenors of the bond issuance to make sure this will not compete with the BSP’s TDF and the Treasury bills. — L.W.T. Noble





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