{"id":251786,"date":"2020-04-10T20:45:47","date_gmt":"2020-04-11T00:45:47","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=251786"},"modified":"2020-04-10T20:45:47","modified_gmt":"2020-04-11T00:45:47","slug":"bsp-undertakes-extraordinary-measures-to-boost-liquidity","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2020\/04\/10\/bsp-undertakes-extraordinary-measures-to-boost-liquidity\/","title":{"rendered":"BSP undertakes extraordinary measures to boost liquidity"},"content":{"rendered":"
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In a statement, the central bank said that since March 24, 2020, it opened a daily one-hour window from 9:30-10:30 a.m. to buy a select series of highly traded and liquid GS from banks at market prices. (File Photo<\/a>: Bangko Sentral ng Pilipinas\/Facebook<\/a>)<\/figcaption><\/figure>\n
MANILA<\/strong>\u00a0\u2013 The Bangko Sentral ng Pilipinas (BSP) is shoring up domestic liquidity to address the economic impact of the coronavirus disease 2019 (Covid-19) pandemic.<\/div>\n
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It has decided to implement extraordinary measures to help in the national government\u2019s Covid-19 response by, among others, expanding the range of peso-denominated government securities (GS) that it buys starting April 8.<\/div>\n
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In a statement, the central bank said that since March 24, 2020, it opened a daily one-hour window from 9:30-10:30 a.m. to buy a select series of highly traded and liquid GS from banks at market prices.<\/div>\n
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However, this changed on Wednesday after it decided to purchase not just select series but all peso-denominated GS issuances.<\/div>\n
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\u201cThis measure is aimed at reassuring market participants of demand for GS should they need to liquidate their holdings thus, encouraging participation in the GS auctions,\u201d the BSP said.<\/div>\n
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The central bank said this exercise will remain open between April and June 2020, or until market conditions return to normal.<\/div>\n
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Along with the decision to purchase peso-denominated GS is the cut of its offering for the overnight reverse repurchase (RRP) facility starting April 8 \u201cas necessary depending on liquidity conditions to encourage counterparties to lend in the interbank market or re-channel their funds into other assets such as GS or loans.\u201d<\/div>\n
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These are on top of the PHP300-billion repurchase agreement with the national government (NG) wherein the BSP will buy a three-month GS from the Bureau of the Treasury for a (BTr) at no cost.<\/div>\n
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\u201cThe Monetary Board may extend the repurchase period for a maximum of three more months upon due date, if conditions so warrant. In turn, the NG shall use the proceeds to finance expenditures authorized in its annual appropriation, as deemed necessary to support programs to counter the impact of the Covid-19 outbreak in the country,\u201d the BSP said.<\/div>\n
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The central bank said these measures are being made since the global pandemic caused by the coronavirus disease (Covid-19) \u201chas had a sweeping impact on economies and financial systems around the world.\u201d<\/div>\n
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\u201cThe outlook for global economic growth has dimmed considerably in Q1 (first quarter) 2020, while turbulence in financial markets has constrained liquidity. These developments have prompted monetary authorities around the world to step in to cushion economic activity and stabilize financial markets,\u201d it said.<\/div>\n
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As a result of this global development, the BSP said it has observed some volatility in the domestic financial market in recent weeks, as uncertainty over the impact of the health crisis continues to dampen market sentiment.<\/div>\n
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The central bank said while it \u201cbelieves that the Philippine financial system remains sound with adequate capital and liquidity buffers, we also recognize the need to shore up market confidence to ensure the proper functioning of the financial market and prevent serious repercussions on the economy over the medium term.\u201d<\/div>\n
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\u201cTherefore, guided by its mandate as the country\u2019s central monetary authority, and in accordance with the provisions of the New Central Bank Act, the BSP deems it necessary to take extraordinary measures to complement the national government\u2019s broad-based health and fiscal programs in mitigating the impact of Covid-19,\u201d it said.<\/div>\n
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By ensuring sufficient liquidity in the financial system, the BSP aims to assist its financial intermediaries in responding to the needs of Filipino households and businesses amid these challenging times, it added.<\/div>\n
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In a piece he wrote for the Nikkei Asian Review, BSP Governor Benjamin Diokno said monetary officials \u201ccan increase to PHP500 billion if necessary\u201d the repurchase agreement with the NG.<\/div>\n
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Aside from this agreement with the NG, the central bank\u2019s policy-making Monetary Board (MB) has reduced the central bank\u2019s key policy rates by a total of 75 basis points and cut universal and commercial banks\u2019 (U\/KBs) reserve requirement ratio by 200 basis points.<\/div>\n
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Diokno said these, along with several other measures decided just recently, are aimed to ensure sufficient liquidity for households and businesses in these trying times, among others.<\/div>\n
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\u201cNow is the time for swift and decisive leadership, nor for ponderous contemplation that typifies bureaucracies,\u201d he added.<\/div>\n","protected":false},"excerpt":{"rendered":"

MANILA\u00a0\u2013 The Bangko Sentral ng Pilipinas (BSP) is shoring up domestic liquidity to address the economic impact of the coronavirus …<\/p>\n","protected":false},"author":44,"featured_media":151970,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-251786","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","mauthors-joann-villanueva","mauthors-philippine-news-agency"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/251786","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=251786"}],"version-history":[{"count":1,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/251786\/revisions"}],"predecessor-version":[{"id":251787,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/251786\/revisions\/251787"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/151970"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=251786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=251786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=251786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}