In a statement on Monday, Nov. 18, 2024, BSP Governor Eli Remolona Jr. said these measures aim to boost market liquidity, enhance the transmission of monetary policy, and attract both local and foreign investors
“This whole effort is just one of many steps the national government, the BSP, and Philippine and foreign banks are working on very closely together to achieve these objectives,” he said. “Foremost among these is to provide the liquidity investors need to invest in our fast-growing economy.”
Key initiatives include the Bureau of the Treasury’s recent introduction of procedures that allow residents from 43 countries covered by tax treaties to pay only the agreed treaty rate without needing to seek refunds. This change is expected to simplify processes and encourage foreign investments.
Additionally, the Bureau of the Treasury is concentrating issuance and bond reopenings to create more liquid benchmarks in selected maturities, further enhancing the efficiency of the bond market.
The BSP is also working on adopting Global Master Repurchase Agreement contracts, which will allow it to deliver Treasury bonds to banks during monetary policy operations. This move is expected to strengthen the government securities repo market by making these assets more accessible and profitable for banks.
Furthermore, the Department of Finance is advocating for legislative reforms to simplify tax rates on passive income and financial intermediaries, aiming to make the Philippine bond market more competitive
“These initiatives will make it easier for the BSP to transmit monetary policy, maintain price stability, and promote sustainable growth and job creation,” Remolona added.
The reforms are seen as a crucial step toward positioning the Philippines in global financial indices and enhancing its economic competitiveness.
