Institutional setup of monetary policy decisions and operations

Policy decision body, size and composition Monetary Board composed of seven (7) members as follows: the BSP Governor; a member of the Cabinet designated by the President of the Philippines; and five (5) members coming from the private sector
Major mandates 1 The primary objective of the BSP is to maintain price stability conducive to a balanced and sustainable growth of the economy and employment. 2
Decision-making process The decisions of the Monetary Board concerning monetary policy are determined by a majority vote. To strengthen the decision-making process, the Monetary Board of the BSP receives recommendations from the Advisory Committee. 3
Frequency / length of meetings 8 times a year
Frequency of announcements 8 times a year 4
Main policy target Inflation 5

Overview of key features

Key policy rate O/N RRP rate
maturity (days) 1
Operating target No formal target
maturity (days)
Standing facilities Lending, deposit
Corridor width (bp) 100
Reserve requirements Yes
maintenance period 1 week
Main operation 6 RRP
functions Liquidity management; reinforce the policy rate
maturity (days) O/N
regular interval Yes
frequency 1 x d
Overall frequency 1 x d
Discretion left to operational desk Some discretion with respect to size and timing
Key policy signals via
keynote tender
standing facility

Monetary policy communication

Explicit use of forward guidance Yes
Timing / media of policy announcement Press release at 3 PM on the day of monetary policy meeting 7
Policy announcement and documents Press Statement and Monetary Policy Report (4 times a year) 8
Explaining policy decisions Detailed press release/media statement and the Monetary Policy Report
Dissemination of minutes (timing / media) Yes, 4 weeks after the monetary policy meeting
Content of minutes Description of economic and financial conditions and the key considerations behind policy decision (highlights of the meeting)
Publication of forecasts 9 Inflation forecasts are included in the published Highlights of the Meeting of the Monetary Board on the Monetary Policy Stance and the Monetary Policy Report
Publication of projected path of policy rate 10 No

Reserve requirements: ratios and size

Main functions served Liquidity management
Domestic currency .12 11
Foreign currency
Required reserves PHP1,563.7 billion 12
Required reserve as % of GDP .0806 13
Actual reserves PHP1,655.6 billion 14
Actual reserve as % of GDP .0853 15

Main features of reserve requirements

Averaging N
Carry-over Y 16
Type Lagged 17
Maintenance period 1 week
end (day) Thurs
Calculation period 1 week
end (day) Thurs
Lag before maintenance 1 week
Vault cash N
Remuneration N
average rate
marginal rate
Framework last changed 4/12 18

Liquidity position and forecasting

Structural Position Liquidity surplus
Most volatile factor(s) Government sector flows, foreign exchange operations
Most unpredictable factor(s) Government sector flows, foreign exchange operations 19
Forecast horizon(s) 2 months
Frequency Daily
Frequency of revision Daily
Forecast published? No

Standing facilities: lending / market ceiling

Name Overnight Lending Facility
Form Collateralized loan
Pricing method Fixed rate
Maturity O/N
Access limited by/to Collateral; banks and non-banks with quasi-banking functions (NBQBs)
Function(s) Limit interest rate volatility; reinforce upper limit of operational band

Standing facilities: deposit / market floor

Name Overnight Deposit Facility
Form Deposit
Pricing method Fixed rate
Maturity O/N
Access limited by/to Banks and NBQBs; resident funds
Function(s) Liquidity management; reinforce lower limit of operational band

Open market operations: repo or reverse repo

Name/Type 20 Reverse Repo
Maturity 1 day
Frequency Daily
Pricing method Fixed rate auction
Access limited by/to Eligible Government Securities; banks and NBQBs
Function(s) Liquidity management (liquidity absorption); reinforce the policy rate

Open market operations: central bank bills

Name BSP Securities: BSP Bills and BSP Bonds
Total issuance PHP580.2 billion as of 23 August 2022
Maturity 28 days
Restrictions on possible maturities No restriction
Pricing method Auction
Access limited by/to Only BSP domestic counterparties and trust entities (limited to secondary market only) can buy and hold BSP Securities. Trust entities are allowed to participate in the secondary market through UITFs.
Discretion left to operational desk Size

Open market operations: FX swaps

Maturity Varies (up to 1 year)
Frequency As needed
Pricing method Bilateral with counterparties and brokers
Access limited by/to BAP Member banks
Function(s) Liquidity Management

Other significant liquidity management means

Name/Type 21 (1) Term Deposits for liquidity siphoning
(2) OT GS purchases from secondary market
Form (1) Fixed term deposit for banks and NBQBs
(2) OT GS purchases from secondary market 22
Frequency (1) Weekly
(2) Daily
Maturity (1) 7 days, 14 days
(2) all tenors
Pricing Method (1) Auction
(2) Bilateral agreement with counterparty
Access limited by/to (1) Banks and NBQBs; resident funds
(2) Banks and NBQBs
Function(s) Liquidity management

Settlement systems and intra-day liquidity facilities

Settlement system RTGS (PhilPaSSplus), since 2002
Intra-day liquidity facility Intra-day liquidity facility (ILF)
Charge The ILF availment, if repaid before the end of day, is not charged an interest. It gets converted to an OLF if unpaid after 5:00 P.M. and then to an outright sale the next day if the bank fails to return the funds. 23
Foreign currency settlement system Yes - Philippine Domestic Dollar Transfer System (PDDTS) for USD transfers
CLS participation by banks Yes 24
Other settlement system(s) Securities Settlement System 25


Standing facilities: List of eligible collateral (1) Government Securities (2) Eligible credit instruments, such as promissory notes, trust receipts and export bills, which proceeds were used for economic activities and secured by acceptable underlying collaterals, depending on the type of economic activity, as follows:
a. Duly notarized assignment of export or domestic letters of credit, confirmed purchase orders or sales contracts;
b. Duly registered mortgage on real estate property;
c. Acceptable guarantees/sureties; or
d. Marketable debt instruments issued by the National Government and all its instrumentalities, including Republic of the Philippines United States Dollar-denominated bonds. 26
Standing facilities: Discretion of central bank on collateral 27 The BSP may prescribe additional credit instruments and collaterals eligible for rediscounting facility. Relatedly, as part of its responses to the economic threat of Corona Virus Disease 2019 (COVID-19) pandemic in the Philippines, the BSP implemented temporary measures in its Rediscount Facilities, including the acceptance of additional credit instruments, effective until 31 January 2021, subject to extension as may be approved by the Monetary Board. 28
Open market operations: List of eligible collateral Government Securities
Open market operations: Discretion of central bank on collateral 29

Dissemination of operational information: liquidity forecast

Forecast published? No

Dissemination of operational information: open market operations

Volume and price published? Yes – RRP, Term Deposits, BSP Securities, Overnight Deposits, Overnight Lendings, outright sales/purchase of government securities, FX swaps
Channel(s) BSP website, the BSP Monetary Operations System (MOS), Information Providers like Reuters and Bloomberg, official publication
Timing Results of RRP, TDF, and BSP Securities auctions are published on the MOS immediately after completion of each operation; weekly BSP Securities and TDF auction results are also published on the website after the auction; For other operations, information on volumes are published on the website on a monthly basis.

Dissemination of operational information: standing facilities

Lending facility usage: Channel(s) BSP website, official publication
Lending facility usage: Timing Weekly, monthly
Deposit facility usage: Channel(s) BSP website, official publication
Deposit facility usage: Timing Weekly, monthly

Other information dissemination

Type N/A
Channel(s) N/A
Timing N/A

1 Describe as well the legal status of the mandate and involvement of government

2 Based on Republic Act (RA) No. 7653 as amended by RA 11211, the following are also included as BSP's mandates: promotion of financial stability; overseeing the payment and settlement systems of the Philippines; and promotion of broad and convenient access to high-quality financial services.

3 The Advisory Committee (AC) is a technical body which meets regularly a few days prior to each MB monetary policy meeting. The AC members agree by majority vote on a set of recommendations that are submitted to the Monetary Board.

4 Same as the frequency of meetings since announcements on the monetary policy decisions are made after each meeting.

5 One of the primary mandates of the BSP is price stability and this entails anchoring inflation expectations.

6 RP = reversed purchase (repo, inject liquidity), RS=RRP=reversed sale (reverse repo, absorb liquidity), RT=reversed transaction (repo or reverse repo).

7 Last 5 November 2021, the BSP decided to adjust the time of the announcement of the Monetary Board’s decision to 3:00 PM Philippine Standard Time (PST) instead of 4:00 PM PST. Doing so aligned the BSP’s monetary policy decision announcement practice with other central banks, which typically announce their respective decisions during market trading hours. This practice took effect beginning with the 18 November 2021 Monetary Board meeting on the monetary policy stance.

8 In February 2022, the BSP began publishing the Monetary Policy Report (MPR), replacing the quarterly BSP Inflation Report. The MPR is set to be published 4 times a year, corresponding with major forecast updates. The greater part of the report is devoted to the forward-looking discussions on inflation and the key macroeconomic variables that affect inflation, as well as the risks and uncertainty surrounding the BSP’s inflation forecasts.

9 For instance, economic and inflation forecasts related to policy decision.

10 If applicable, describe the publication of any fan-charts or uncertainty bands around the forecasts/projections.

11 Rate applicable to universal and commercial banks (U/KB). There are no reserve requirements on foreign currency deposits (FCDs). However, banks are required to have 100 percent asset cover on FCDs.

12 For UKBs as of 31 July 2022

13 Against 2021 Nominal GDP (PHP 19.410 trillion)

14 For UKBs as of 31 July 2022

15 Against 2021 Nominal GDP (PHP 19.410 trillion)

16 Banks are allowed to offset reserve deficiencies occurring on one or more days of the reference week with any excess reserves held on other days of the same reference week. However, appropriate monetary penalties, as may be prescribed by the MB, will apply should the bank end up with a net deficit position for the reference week. Additionally, the BSP revokes a bank’s offsetting privileges if it incurs deficiencies on at least four (4) or more times per reference week for two consecutive weeks, whether or not resulting in net wekely deficiencies.

17 Changed from a contemporaneous system to a lagged system in October 2000.

18 Unified the statutory and liquidity reserve requirement into a single, combined requirement. Cash in vault omitted as eligible reserves. Only reserve deposits with the BSP remain eligible as reserve cover. Remuneration on reserves deposits discontinued.

19 BSP's purchases of government securities in 2020, and foreign exchange operations in 2020 and 2022

20 RP=Reversed purchase (“repo”), RS=RRP=Reversed Sales (“reverse repo”), RT=Reversed transaction (RP or RRP).

21 OT = Outright Transaction, DB = Direct Borrowing, DL = Direct Lending.

22 (2) The daily window for outright purchases of GS from secondary market opened on 24 March 2020 in response to tight liquidity conditions resulting from the pandemic

23 The government securities in the BSP-ILF are valued based on the 4:30 P.M. BVAL rates of the previous day, published on applicable PDEX pages. At the start of the banking day, participating banks/NBQBs sell to the BSP the securities in the CSA-ILF pool based on the value established. BSP credits the proceeds of the sale to the respective demand deposit (DD) accounts of the seller with the BSP. At 5:00 P.M., the BSP then sells back the securities at the same price in accordance with set guidelines.

24 In 2020, CLS added a Philippine bank in its list of participants for the settlement of foreign exchange.

25 NRoSS-PhilPaSSplus facility for the settlement of government securities

26 (1) Acceptable collateral in the Overnight Lending Facility (2) The Rediscount Facility is a standing credit facility of the Bangko Sentral ng Pilipinas (BSP) to help banks, which have active rediscounting line with the BSP, meet their temporary liquidity needs in line with the objective of maintaining price and financial stability. The eligible papers and collaterals for rediscounting with the BSP, which depend on the type of economic activity they are used for, are set forth is Section 282 of the Manual of Regulations for Banks ( For more information on the BSP's Rediscount Facility please refer to the Frequently Asked Questions on Rediscounting (

27 Discretion of the central bank to expand collateral types, and list of additional collateral types that the central bank can take on a discretionary basis. Also, additional information such as delays required if discretionary collateral changes.

28 The authority of the BSP to prescribe additional credit instruments for rediscounting is pursuant to Section 82(c) of Republic Act (RA) No. 7653, as amended by RA No. 11211, otherwise known as The New Central Bank Act. As regards the temporary measures implemented by the BSP in its Rediscount Facilities in response to the COVID-19 pandemic, please refer to BSP Memorandum No. M-2020-076 dated 29 September 2020 (

29 Discretion of the central bank to expand collateral types, and list of additional collateral types that the central bank can take on a discretionary basis. Also, additional information such as delays required if discretionary collateral changes.