BSP to ban foreign funds from overnight facility

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The Bangko Sentral ng Pilipinas may soon ban foreign funds from being invested in its overnight borrowing facility—a move seen to address risks of the country attracting even bigger volumes of speculative capital from abroad.

Prohibiting foreign funds from being parked in the reverse repurchase (RRP) facility of the central bank is seen to complement the standing rule against the investment of foreign funds in special deposit accounts (SDAs) in the BSP.

According to economist Felipe Medalla, who sits in the policy-making Monetary Board of the central bank, the growing liquidity in the domestic economy necessitated appropriate policies that would help ensure inflation would be contained within manageable levels.

Therefore, he said that making sure that the BSP’s facilities did not attract foreign funds, which could cause a further buildup in domestic liquidity, was in the agenda of monetary officials.

Last week, the BSP further cut the interest rate on SDAs to 2.5 percent. This followed the move in January to slash the interest rates on SDAs to a uniform 3 percent (previous rates were set above 3.5 percent at varying margins depending on maturity).

The cut in the SDA rate is expected to further discourage the placement of foreign funds in SDAs. Despite the prohibition, there was suspicion some foreign funds were still being invested in SDAs.

But with the SDA rate now much lower than the central bank’s RRP or overnight borrowing rate, which stands at 3.5 percent, Medalla said there was a probability that some funds from the SDAs might simply shift to RRPs.

He said that given the objective of keeping inflation modest, the BSP would be willing to accommodate more deposits in its RRP facility should domestic liquidity grow.

In particular, he said the BSP might avail itself of more government securities to increase its capacity to accommodate deposits through the RRP facility (under the central bank’s charter, the amount of deposits it can accept from banks through the RRP facility is limited by its holdings of government securities, which serve as collateral).

However, he said it was not the job of the BSP to accommodate foreign funds.

“If the RRP would be attracting foreign money, then that would defeat the purpose [of tempering liquidity growth in the domestic economy],” Medalla yesterday said at the sidelines of the launch of the “Asian Bond Monitor,” a quarterly publication of the Asian Development Bank. “We [BSP] don’t want to mop up excess global liquidity.”

Medalla said the BSP was prepared to act in case it saw signs of a significant growth in liquidity. In particular, he said, the BSP was willing to make the RRP facility play a bigger role in sterilizing excess funds circulating in the economy by accommodating more deposits if necessary.

“So far, that is not happening. But if we see that there is too much liquidity growth, then the RRP should have a bigger role as a major tool [to counter inflationary pressures],” he said.

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  • Lauro

    Growing liquidity should concern CB, other monetary governing bodies, and other economic bodies of the country. They all should come up with a healthy balance. For all we know growing liquidity is an indicator that investment is stagnant … projects must be brought forward to absorb excess liquidity … projects, however, must be studied and planned carefully so that they sustainable and productive to recoup the cost of investment. OUR GOVT PLANNERS ARE WAY TOO SLOW … KAYA NAPAGIIWANAN ANG PINAS … PURO TAYO FREEDOM HERE >>> FREEDOM THERE >>> DEMOCRACY THAT >>> DEMOCRACY THIS …. hahahahaha!!!

    THINK ABOUT THE RIGHT OF MOST OF THE POPULATION … RIGHT TO DECENT LIVING!!!!

  • http://profile.yahoo.com/SPLUBLEOSERDBOIJTDOC6XIWGU mxsclxmxn

    The Lying and Deception begins with the “G”

    Ex-33 degree Mason Jim Shaw says; “The
    Blue Lodge Mason is taught that the “G” in the basic Masonic symbol represents
    God. Later on, he is told that it represents “deity”. Later still, he is told
    that it represents “geometry”.

    In reality, this letter represents the “generative principle,” the Sun-god and, thus, the
    worshipped phallus, the male “generative principle…” In its position (along
    with the square and compass) on the east wall over the chair (throne) of the
    Worshipful Master, it is the representation of the Sun, thus of the Sun-god,
    Osiris. Its earthly meaning, then, is of the sacred phallus; its cosmic meaning
    is of the Sun, worshipped since antiquity by pagans while facing the East.
    Reference, book: The Deadly Deception”, page 144

    Freemasonry is one of many apostate
    religions dedicated to the destruction of traditional Judaism and Christianity.
    Those who aspire to grow in their closeness to Jesus Christ, and to increase
    their discernment in these days, would do well to stay very clear of
    Freemasonry. Are your loyalties with Jesus Christ or are they with the lodge?
    Both are diametrically opposed to one another as you will see
    below.

    Freemasonry is a hidden fraternal order, and defined by them as a system of morality. The first three steps are the Blue Lodge. The first degree is called Entered Apprentice. The second degree is called Fellow Craft. The Third degree is called Master Mason. Most men only go to the third degree, but if one chooses, he may advance either through the York Rite or the Scottish Rite. The Scottish Rite has thirty-two degrees. In each degree, the Mason pledges himself to a different Egyptian deity. There is a thirty-third degree that is largely honorary, but the thirty-two degrees give you access to becoming a Shriner. As a Shriner you will place your hand on the pagan Muslim Qur’an (Koran) and pledge yourself to the pagan “god” Allah; who by the way lies that Jesus did not even die on a cross, and that God has no Son. This pagan ‘Allah’ never once shows that it knows the real name of God (Jesus/Yeshua/Yahweh/I am).

  • http://profile.yahoo.com/SPLUBLEOSERDBOIJTDOC6XIWGU mxsclxmxn

    Masons repeatedly are directed to the “Mystery Religion” and the time man found God in nature. Almost none of Masonry’s teachings come from Christianity. This ‘mystery religion’ Masons have joined originated from pagans in ancient Egypt, Chaldea, and in China. The Mystery Religion, Freemasonry and all ‘ancient’ secret societies have one thing in common. They string you along, just to finally tell you that there is no God; and you are a god, because you follow their teachings, which are:Relax. Be greedy. Be selfish – if these help you get ahead. Win at any cost. Enjoy your expensive Freemason diamond ring and other symbols, pay your hefty dues on time, and follow the Masonic – path. And you too will be successful – because there is no Hell, and no higher authority other than Lucifer; who is misunderstood.

    Once Masons progress to the higher degrees and they finally believe the ‘Masonic lie”; and they will ‘understand’ that the Grand Architect of the Universe is not the God of the Old or New Testaments, but instead is the perfect dues paying Mason in good standing, who like the statue example above, they chipped away at, and finally shed needless ‘layers’ from both their old useless religion, and from loyalties outside of Masonry, which all along were what concealed them from their own personal true image, as the one and only real God.

  • http://profile.yahoo.com/SPLUBLEOSERDBOIJTDOC6XIWGU mxsclxmxn

    BSP Grand Conspiracy with Free Masonry now in Philippine Bill!

    Satan’s Synagogue as per Pope Clement XII year 1738

    In the P100 BILL series 2012 Serial # ZK188477 has a logo of the Grand Lodge of Free and Accepted Masons. Freemasonry has its goal of destroying Christendom and replacing it with man-centered government and Satanic religion filled with errors.

    How can this logo of a satanic group be allowed to print in the monetary instrument of the country with the constitution believing in a God asking for HIS Divine Providence?

    In Freemasonry the god of the secret societies is covertly substituted for the One True God. This false god is identified in the Masonic lodges as “the Great Architect.”

    Since Freemasonry has attempted so strenuously to claim that they are just a “good ole boy” fraternity that does good works and has a good time, most people will be shocked to learn the bitter truth behind that facade. Freemasonry certainly isn’t “free”. It could cost you your soul.

    Once Masons progress to the higher degrees and they finally believe the ‘Masonic lie”; and they will ‘understand’ that the Grand Architect of the Universe is not the God of the Old or New Testaments, but instead is the perfect dues paying Mason in good standing, who like the statue example above, they chipped away at, and finally shed needless ‘layers’ from both their old useless religion, and from loyalties outside of Masonry, which all along were what concealed them from their own personal true image, as the one and only real God.

    Freemasonry is one of many apostate religions dedicated to the destruction of traditional Judaism and Christianity. Those who aspire to grow in their closeness to Jesus Christ, and to increase their discernment in these days, would do well to stay very clear of Freemasonry. Are your loyalties with Jesus Christ or are they with the lodge? Both are diametrically opposed to one another as you will see below.

    Masons have mixed idolatry, paganism, the occult, Gnosticism, Kabala, fertility cults, Satanism, spiritualism, demonology, and put it into a blender and come up with the Masonic religion. It is not of God! It is a false religion; the Harlot of Babylon. Masons say they offer new candidates “the light”. The light they are actually giving is: Lucifer. The Christian Bible says that Satan walks to and fro on this earth masquerading as an “angel of light”, that many might be deceived.

    An insidious byproduct of Freemasonry is to keep husbands and wives out of churches & away from their children and their homes…

    Satan does not need to receive worship to achieve his goals. All he has to do is to keep a man from following Jesus. Satan knows that anyone who does not follow in the teachings of Jesus does not have God. (2 John 9)

  • Hayek_sa_Maynila

    BSP should seriously assess whether money supply expansion per se does translate to inflation. Lets set aside theory for now. BSP should focus on finding out the real factors behind inflation and economic overheating in our economic history…could these be mostly due to temporary supply factors, which had little to do with monetary policy? How did the poor balance of payments position of the country in the past affect inflation? Now that our external position is so much stronger, is there really a threat of a massive (vs. moderate) currency-depreciation-induced inflation?

    Also, if local firms can borrow much lower abroad to fund their expansion plans, keeping BSP policy rates where they are (which are much higher than rates abroad) can just continue to pressure the peso to strengthen and make local companies more and more dependent on external borrowings. Now that’s even more dangerous than just letting domestic money supply grow faster than its current 10.8%. Will 20%, 30%, 40% be too much? Who can tell? What’s for sure is that 1997 can happen again if we let the peso strengthen or the make the market believe that the peso will continue to strenghthen (one way bet) and keep the rate differential between foreign and domestic interest rates wide.

    …unless BSP is seriously considering Tobin taxes. Now that’s a different story altogether.

    • WeAry_Bat

      bow ako sa comment

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