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Nov 21, 2017 @ 19:50

Gov’t to launch debt market reforms with repo market this Nov — BSP


The long journey starts now.

Government bonds will now have a market for repurchase deals under a new program run by the Bangko Sentral ng Pilipinas (BSP), the Department of Finance, the Bureau of the Treasury, and Securities and Exchange Commission.

BSP Governor Nestor Espenilla, Jr. said the government’s capital market reform strategy for the next 18 months will kick off with a repo exchange market starting Monday, Nov. 27, 2017.

“There is much room for growth in the domestic debt market. The numbers show that the outstanding local currency bonds represent a mere 34.2 percent of the country’s GDP,” Espenilla said in a speech.

“The reforms are geared towards increasing transparency in the issuance and pricing of government bonds that would translate into increased efficiency, lower borrowing cost, and more dynamic participation.”

A repo deal allows banks to sell their holdings of government-issued bonds for cash, with the promise of buying the securities back.

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