July 31, 2001
BSP CIRCULAR LETTER
| TO | : | All Banks and Non-Bank Financial Institutions Performing Quasi Banking Functions |
| SUBJECT | : | Intraday Liquidity Facility for the Implementation of Circular 266 thru the Improved Interbank Call Loan Funds Transfer System (MIPS2) |
In its Resolution No. 1139 dated July 19, 2001, the Monetary Board, amended its Resolution No. 480 dated March 26, 2001 which approved the establishment of the Intraday Liquidity Facility (ILF) to support the implementation of Circular 266 thru MIPS2. Circular 266 amended the rules on settlement of transactions involving interbank loans and government securities under repurchase agreements with the Bangko Sentral ng Pilipinas (BSP) in connection with its open market operations. The Circular prescribes settlement of these transactions gross, on trade-for-trade basis and with finality, subject to the availability of balances in the deposit reserves maintained by banks and non-bank financial institutions with quasi-banking functions (NBQBs) with the BSP.
BSP recognizes that there are interbank transactions, other than check clearing, that are still settled on net basis. These interbank transactions include secondary trading of government securities and peso-netting...
