Bloomberg launches electronic repo trading platform in PH

Bloomberg, in partnership with the Bankers’ Association of the Philippines (BAP), Money Market Association of the Philippines (MART), and Philippine Depository and Trust Corp (PDTC), recently announced the launch of an electronic repo trading platform for financial market participants in the Philippines.

From left to right: Michael Delfino, President of MART; Nestor Tan, President and CEO of BDO Unibank, Inc.; Teresita J. Herbosa, Securities and Exchange Commission Chairperson; Gil Beltran, Undersecretary of Finance; Nestor A. Espenilla Jr., Bangko Sentral ng Pilipinas Governor; Rosalia V. De Leon, Treasurer of the Philippines.

From left to right: Michael Delfino, president of MART; Nestor Tan, president and CEO of BDO Unibank.; Teresita J. Herbosa, Securities and Exchange Commission chairperson; Gil Beltran, undersecretary of finance; Nestor A. Espenilla Jr., Bangko Sentral ng Pilipinas governor; Rosalia V. De Leon, treasurer of the Philippines

In support of the country’s roadmap to establish a peso repo market, the new platform is linked directly to PDTC, enabling straight-through processing and surveillance of all repo trades, a first in Asia.

The inaugural repo trade was conducted on November 28 and witnessed by Secretary of Finance Carlos G. Dominguez III, Treasurer of the Philippines Rosalia V. De Leon, Bangko Sentral ng Philipinas (BSP) Governor Nestor A. Espenilla Jr., and Securities and Exchange Commission Chairperson Teresita J. Herbosa, other government officials, and bank presidents and treasurers during the 120th anniversary celebration of the Bureau of Treasury.

Repurchase agreements, or repos, are a well-established source of money market funding in the global financial market. Repo markets are essential in developing and deepening debt and money markets as an active repo market allows credit risk free access to funding.

At the launch, Espenilla said: “While our local currency bond market has grown over the last decade, it still remains as one of the smallest in the regions. Understanding the importance of a deeper, a more active capital market to compliment bank lending to serve as an alternative source of industry financing, we made a bold commitment and unveiled the road map for developing the local debt market. This includes organizing the repo market for government securities.”

With Bloomberg’s repo platform in place, repo counterparties now have a standardized calculation and communication platform with complete transparency of collateral details. Once trades are electronically confirmed on Bloomberg, PDTC’s gateway will automatically pick up and display the trades for final verification and settlement authorization.

MART has also set up a new governance structure to oversee the repo market and will have full visibility of all trades for efficient monitoring and surveillance.

“The repo trading platform, the self-regulatory organization (SRO) will have visibility on all trades, which in turn will strengthen regulatory oversight and ensure the repo market grows in an orderly manner and will aid reforms to develop the local debt market,” said Michael Delfino, President of MART.

“The Philippines is setting a benchmark by being the first country in Asia to adopt straightthrough-processing and achieving full transparency in a repo market,” said Andrea Mosconi, Bloomberg’s head of sales for Asean. “We are pleased to support the establishment of an active repo market in the Philippines by 2019 and will continue to bring scalable and best-in-class technology to ensure optimal efficiency of the market in the long-term.”

Last year, Bloomberg launched its tri-party ticketing system for the interbank community in the Philippines, providing real-time access to brokered foreign exchange forward transactions to market participants. The system allows brokers to seamlessly trade with clients and report their trades, hence improving operational workflow and enhancing market transparency.

Bloomberg is also the official calculating agent for the Philippines interbank reference rate {PHRF} and provider of the FX forwards trading platform.

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