The Bankers Association of the Philippines (BAP) shares the view of the Bangko Sentral ng Pilipinas that as a market, we desire to have a yield curve based on actively traded securities that result in high-volume transactions in the market.
Compared to other markets in the region, the Philippines still strives to have a deeper and more vibrant securities market. Presently, we have the 5-year, 7-year and 10-year securities actively traded in the market — with the 12-year, 15-year, and 20-year bonds receiving strong interests from market participants and investors. These securities provide the banking industry sufficient support for pricing bank products such as loans, mortgages, investments, and marking-to-market of banks’ own portfolios.
We are fortunate that the Philippine market is supported by a globally recognized benchmark methodology that is utilized in over 100 jurisdictions. The Philippine BVAL benchmarks, currently administered by the BAP as an SEC-licensed administrator, remain credible as it even addresses scenarios of limited market activity.
BVAL is compliant with the International Organization of Securities Commissions (IOSCO) principles for financial benchmarks, accepted by the Philippine board of accounting professionals, and supported by regulatory issuances of the Bangko Sentral ng Pilipinas (BAP)and Securities and Exchange Commission (SEC).
BVAL, as a benchmark, is accepted by Philippine financial and capital market participants. Market confidence in the use of BVAL is a result of rigorous back-testing and its ability to perform straight through processing — a critical element to deliver efficient and convenient services to bank customers.
The BAP welcomes the BSP initiatives to enhance the benchmarks. We will continue to work actively with the regulators to ascertain that any foreseeable benchmark implementation undergoes system-wide testing, accreditation, and general acceptance by all market stakeholders.