MORNBFI Vol. 1 - Planters Development Bank

§§ 4601Q - 4601Q.108.12.31PART SIXTREASURY AND MONEY MARKET OPERATIONSA. OPEN MARKET OPERATIONSSection 4601Q Open Market OperationsThe following rules and regulations shallgovern the buying and selling of governmentsecurities in the open market pursuant toSection 91 of R.A. No. 7653:a. The BSP may buy and sell in theopen market for its own account:(1) Evidences of indebtedness issueddirectly by the Government of the Philippinesor by its political subdivisions; and(2) Evidences of indebtedness issuedby government instrumentalities and fullyguaranteed by the Government.The above evidences of indebtednessmust be freely negotiable and regularlyserviced and must be available to thegeneral public through banks, QBs andaccredited government securities dealers.b. Outright purchases and sales ofgovernment securities shall be effected onthe basis of the lowest price offered or thehighest price bid.c. Repo agreements shall be open tobanks (except RBs), QBs and accreditedgovernment securities dealers and shall bemade under the terms provided for inSec. 4601Q.1 and the following:(1) The repo agreement may be paid atany time before maturity at the option ofthe issuer of the repo agreement;(2) In the event the securities coveredby the repo agreement are not repurchasedby the issuer of such agreement, they maybe sold in the open market or transferred tothe BSP Portfolio; and(3) Should an issuer of a repoagreement become no longer qualified assuch, its outstanding repo agreement shallimmediately become due and payable.If settlement of the amount due is not madewithin three (3) days from the date of itsdisqualification, the BSP shall proceed tocollect said amount in accordance with thepreceding paragraph.d. Reverse repo agreements coveringthe sale of portion of the security holdingsof the BSP portfolio may be made under theterms provided for in Subsec. 4601Q.2.§ 4601Q.1 (2008 - 4602Q) Repurchaseagreements with the Bangko Sentral. Repoagreements may be effected with the BSPsubject to the following terms andconditions:a. Rate. The rates on the repurchasefacility shall be set by the TreasuryDepartment, with the concurrence of theGovernor, taking into account prevailingliquidity/market conditions.b. Term. At the option of the TreasuryDepartment, availments may be for aminimum of one (1) day (overnight) and amaximum of ninety-one (91) days.c. Security. Only obligations ofthe National Government and itsinstrumentalities and political subdivisions,which are fully guaranteed by theGovernment, with a remaining maturityof not more than ten (10) years and whichare freely negotiable and regularlyserviced, shall be eligible as underlyinginstruments for repo agreements, subjectto the collateral requirement prescribed bythe BSP.d. Delivery. Delivery of the underlyinginstruments shall be made to the BSP at theprescribed time. For overnight repoagreements, delivery of the underlyinginstruments shall be made not later than12:00 noon of the date of transaction.Manual of Regulations for Non-Bank Financial Institutions Q RegulationsPart VI - Page 1