BSP eases dollar hedging rules | Inquirer Business

BSP eases dollar hedging rules

By: - Reporter / @daxinq
/ 05:28 AM October 04, 2018

Bank regulators have relaxed the rules for their  dollar hedging facility meant to encourage more financial institutions to use it and consequently ease the selling pressure on the peso.

In a statement, the Bangko Sentral ng Pilipinas said the Monetary Board had approved the implementing guidelines of the Currency Risk Protection Program facility  under Circular No. 1014.


The implementing guidelines set the mechanics, pricing and requirements of the CRPP facility, and the availment process has been rationalized to facilitate access.

“The documentation needed to support an application to tap the facility has been simplified in line with the BSP’s efforts to liberalize the foreign exchange market,” regulators said, adding that documents need no longer be submitted to the BSP “but shall be made available to the BSP during on-site examination or off-site verification, if necessary.”


The CRPP is a nondeliverable dollar-to-peso forward contract between the BSP and the bank. In this contract, only the net difference between the contracted forward rate and the spot rate should be settled in pesos upon maturity of the contract.

This hedging scheme was created in the wake of the 1997 East Asian financial crisis, but was used extensively during the country’s political and economic difficulties during the Estrada administration in 2000.

The BSP reactivated the CRPP last month amid heavy selling pressures on the peso, which pushed the local currency to its lowest level in 13 years.

Meanwhile, daily reporting requirement on executed and pre-terminated CRPP contracts has also been dispensed with. Instead, universal and commercial banks shall be required to submit to the BSP notarized certification and deed of undertaking stating that the bank’s CRPP transactions are in compliance with the regulation.

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Bangko Sentral ng Pilipinas, Currency Risk Protection Program, dollar, monetary board, Peso
For feedback, complaints, or inquiries, contact us.

Curated business news

By providing an email address. I agree to the Terms of Use and
acknowledge that I have read the Privacy Policy.

© Copyright 1997-2021 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.