MANILA -- The Bangko Sentral ng Pilipinas’ (BSP) ability to address any issues on domestic liquidity has been further bolstered by the amendment of the Central Bank Act.
Last February 14, President Rodrigo R. Duterte signed into law the measure now called Republic Act (RA) No. 11211, which among others, restored the BSP’s authority to issue debt papers as part of its operations.
BSP Deputy Governor Diwa Guinigundo said this particular part of the newly-signed law provides the central bank to “have the flexibility on the choice of instruments to maintain monetary stability.”
He explained that although the law now allows the BSP to issue debt instruments, monetary officials have yet to determine when to tap this window.
“We are open in terms of timing,” he told the Philippine News Agency (PNA).
And while debt papers are issued to raise capital, Guinigundo said this is not the case for the BSP.
“BSP facilities have never been used to raise funds but exclusively to manage domestic liquidity and sustain price stability,” he said.
“To manage structural liquidity on a longer-term basis, we can tap the RRP more with greater collateral base while keeping the TDF facility for fine-tuning domestic liquidity,” he added.
RRP or the overnight Reverse Repurchase facility, and TDF or the Term Deposit Facility, are among the facilities that the BSP has as part of its monetary operations. (PNA)
