The Bangko Sentral ng Pilipinas announced the launch of a new interest rate swap market Monday, marking a significant step toward boosting trading and liquidity in the domestic bond market.
The Bankers Association of the Philippines said the enhanced PESO interest rate swap market market is now live, following last week’s announcement by the International Swaps and Derivatives Association recognizing BAP’s Philippine Overnight Reference Rate , on which the swaps will be anchored at the short end.
“The enhanced PESO IRS market aims to promote development of yield curves to further support the pricing requirements of short-term credit instruments, such as loans, in the market,” said Paul Favila, chairman of the BAP Open Market Committee. “We are excited for PESO IRS to go live to help boost transactions, create a benchmark yield curve, and deepen our capital markets,” Remolona said.
The BTr is also creating more liquid benchmarks by concentrating issuance and bond reopenings in a few selected maturities.