Robust trading activity among trust entities was observed in 2022, as per data from the Bangko Sentral ng Pilipinas (BSP), with transactions reaching an impressive P1.8 trillion.
The BSP’s decision to permit trust entities of banks to engage in purchasing BSP securities or bills in the secondary market was a strategic move to counter the impact of higher excess liquidity.
Trust entities played a significant role in the secondary market for 28-day BSP bills, accounting for transactions worth P1.8 trillion out of the total P1.9 trillion traded last year.
During the same period, trust entities held outstanding BSP securities amounting to P135.5 billion, signifying their considerable interest in these financial instruments.
BSP securities hold a critical position in the central bank’s liquidity management strategy, aiding in the absorption of excess liquidity within the financial system.
In response to market developments, the BSP recently introduced a 56-day tenor as a catch basin, a move that followed its decision to cut banks’ reserve requirements ratio on June 30.
The year 2022 witnessed robust demand for BSP bills, with the total subscription amounting to an impressive P8.2 trillion, representing 1.3 times the offered volume of P6.3 trillion.