BSP issues rules on e-reporting of repo deals

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) has issued the guidelines on the electronic submission of the report on repurchase agreement of banks amid efforts to strengthen financial surveillance and help ensure continued stability of the financial system. 

BSP Deputy Governor Nestor Espenilla Jr. issued Memorandum Order 2016 – 025 prescribing the data entry template and the corresponding prooflist of the repo report. 

Last November, the BSP’s Monetary Board issued Memorandum Order 2016-015, stating that only electronic submissions originating from officially registered e-mail addresses of banks would be recognized and accepted. 

Espenilla said report submissions that do not conform to the prescribed procedures would not be accepted 

He added applicable penalties would be imposed for late or erroneous reports. 

Last September, the BSP issued circular 923 requiring universal and commercial banks, thrift banks, and quasi-banks to submit the report on repurchase agreements on solo basis. 

“The report on repurchase agreements is designed to capture timely and comprehensive transactional-level data on repos of universal and commercial banks and their subsidiary thrift banks to strengthen financial surveillance, particularly in monitoring market trends and vulnerabilities in the repo market,” BSP Governor Amando Tetangco Jr. said. 

The BSP chief added the report would also allow the central bank to formulate effective policy responses to ensure continued stability of the financial system.

 A repurchase agreement is a contract wherein a bank or quasi bank, in exchange for cash, sells the security to another party under a true sale agreement with simultaneous commitment to repurchase the security at a fixed price at a date certain or on-demand. 

The pilot run of the reportorial requirement would be conducted starting with the Nov. 30 reportorial data for submission.

 Tetangco said the template of the report on repurchase agreements would formally take effect starting with the reporting period ending June 30 next year. 

The BSP publicly buys or sells government securities from banks and financial institutions in order to expand or contract the supply of money in the financial system. 

By controlling the money supply, the central bank is able to exert some influence on the prices of good and services and achieve its inflation objectives.