MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) has issued the guidelines on the gradual discontinuance of access of trust entities to the deposit facilities of the central bank.
BSP officer-in-charge Vicente Aquino said the Monetary Board has issued a resolution approving the discontinuance of access of trust entities to the BSP deposit facilities.
The deposit facilities including the overnight deposit facility (ODF) and the term deposit facility (TDF) serve as a monetary policy instrument for managing domestic liquidity in the financial system.
“It is not intended to become an investment outlet of banks and trust entities,” Aquino stated in the memorandum.
In keeping with the nature of the facilities, access by trust entities to the ODF and TDF would be discontinued in July next year.
Aquino said all trust entities should no longer have outstanding placements in the ODF and TDF by June 30 next year.
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For orderly transition, the BSP said all ODF and TDF placements of trusteed accounts and Unit Investment Trust Funds (UITFs) should be reduced to 50 percent by Dec. 31 this year and to 30 percent by March 31 next year on a per account basis for trusteed accounts and a per fund basis for UlTFs.
“Any remaining ODF and TDF placements shall be terminated by June 30, 2017. It is the responsibility of the trust entities to ensure that any ODF and TDF placements shall mature and/or be terminated by 30 June 2017,” the BSP said.
During this transition period, the BSP reiterated that no new or additional funds should be infused for the ODF and TDF placements of trust entities.
“It is the responsibility of the trust entities to have in place appropriate internal policies and monitoring mechanisms to ensure compliance with this Memorandum and commitments under the Letter of Undertaking,” it said.
The regulator warned any trust entity unwilling or unable to comply with the order would be subject to applicable sanctions provided under existing agreement with the BSP.
