Central Bank of the Philippines adopts Global Master Repurchase Agreement framework for its repo, reverse repo and overnight lending facilities

The Central Bank of the Philippines (BSP) amended the Manual of Regulations for Banks and the Manual of Regulations for Non-Bank Financial Institutions to adopt the Global Master Repurchase Agreement (CMRA) as the governing documentation for its repurchase (RP) and reverse repurchase (RRP) facilities, and for transactions under its Overnight Lending Facility. RP and RRP transactions are opened to banks (universal and commercial banks, digital banks and thrift banks) and quasi-banks, collectively defined as “Participating Entities”, and are to be governed by the CMRA entered into with the BSP alongside other applicable BSP rules. A USD-denominated repo agreement facility may also be entered into, subject to the terms and conditions provided under that facility. Participating Entities bear applicable taxes and other governmental charges on their transactions, while the BSP will provide the relevant tax form if it is required to withhold tax from payments. Separately, the circular updates payment and settlement provisions by replacing “Overnight RRP” with “RRP” in the Standard Operating Procedures for Philippine Holidays, deleting the Appendix on the schedule of Peso real-time gross settlements, and amending MORB provisions on returned checks and temporary overdrawings to refer to schedules “as prescribed by the BSP”; it also updates the automated check clearing guidance to provide for two clearing windows for returned items in local exchanges, with returns processed via a PM window on T+0 and an AM return window on T+1. The amendments take effect 15 days after publication in the Official Gazette or a newspaper of general circulation.