BAP, BSP launch enhanced Peso IRS market

The Bankers Association of the Philippines (BAP) and the Bangko Sentral ng Pilipinas (BSP) launched an enhanced Peso Interest Rate Swap (Peso IRS) market on Monday, November 18.

Sixteen BAP member-banks will serve as market-makers for short- and long-term swaps against the Overnight Reference Rate (ORR), with Bloomberg acting as the trading platform based on the daily variable Reverse Repurchase Rate (RRP) published by the BSP.

The enhanced Peso IRS market aims to promote development of yield curves, further supporting the pricing requirements of short-term credit instruments such as loans in the market.

These banks include BDO Unibank, Inc., Bank of the Philippine Islands (BPI), China Bank, EastWest Bank, Metrobank, Philippine National Bank (PNB), Security Bank, Rizal Commercial Banking Corporation (RCBC), and UnionBank of the Philippines, among others.

The BSP sees this launch as a significant step towards boosting liquidity in the domestic bond market and deepening local capital markets, alongside efforts to adopt Global Master Repurchase Agreement contracts for treasury bond transactions.