BSP eyes to have a uniform financial benchmark within ‘14

Bangko Sentral ng Pilipinas (Central Bank of the Philippines). Wikipedia photo

MANILA — The Bangko Sentral ng Pilipinas (BSP) expects to come out within this year with a financial benchmark that banks will use for the pricing of their loans.

BSP Governor Amando Tetangco Jr. said they have distributed proposals to the banks for comments.

He said the proposed financial benchmark would be like the London Inter-Bank Offered Rate (LIBOR), which is among the main reference rate of banks around the world.

”This one has been already circulated among the banks for their comments. If they have comments we will evaluate these,” he said.

The central bank chief said they want banks to have a uniform lending rate and this will be announced through the issuance of a circular.

Among the reference rate that banks use to date include the government’s three-month Treasury bill (T-bill), which as of last Monday averaged at 1.

157 percent, higher than the 1.035 percent last June.

T-bill rates have been increasing due to factors like the continued of tapering in the Federal Reserve’s stimulus program and the increase but still within-target Philippine inflation rate.

Other reference rate that banks use is the central bank’s overnight borrowing rate, which to date is at record-low of 3.5 percent, and the special deposit account (SDA) rate, which is currently at 2.25 percent.