BSP fine-tunes monetary operations

The Bangko Sentral ng Pilipinas (BSP) has limited its term deposit facility (TDF) and short-term securities to a single tenor each as it aims to enhance monetary policy transmission and push banks to better manage their liquidity.

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"When we consulted with banks they (said they) can manage their liquidity positions even with fewer facilities," BSP Deputy Governor Zeno Ronald R. Abenoja told BusinessWorld on the sidelines of an event last week.

"So, it's really to improve the transmission of monetary policy and then also encourage banks to manage their liquidity on their own."

Mr. Abenoja assured that the central bank's decision to narrow the offerings of its facilities to single tenors was merely "fine-tuning" and not prompted by any market disruption.

"The banks knew about it well in advance. So, we discussed it beforehand," he said. "So, (it was just) tweaking (and) small, fine-tuning. There aren't any disruptions."