The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas, approved the exclusion of debt securities acquired as a result of market-making activities of financial institutions from the Single Borrowers Limit for 90 and 60 calendar days to contribute to capital market development.
BSP Governor Benjamin Diokno said the SBL relief would “provide supervised financial institutions with additional latitude to engage in market-making activities and enable them to continue providing prices for the debt securities in the secondary market as well as to make available an exit mechanism for investors to liquidate their holdings”.
Diokno said the initiative “will ultimately promote liquidity and price transparency in the market”.
The new policy provides that debt securities acquired from market-making activities from Aug. 1, 2020 to July 31, 2021 will be excluded from the SBL computation for 90 calendar days from the time of acquisition of the securities. Beginning Aug. 1, 2021, the debt securities will only be excluded from the SBL computation for a period of up to 60 calendar days.