THE Bangko Sentral ng Pilipinas (BSP) will not be issuing longer-term securities given its focus on liquidity management. "We have no plans for that," BSP Governor Eli Remolona Jr. said in a briefing on Wednesday. "Longer term bonds are for financing of, say, government operations, but what we are doing now is purely a liquidity effort," he added. The central bank currently offers 56- and 28-day BSP bills to enhance its monetary operations under the Interest Rate Corridor framework. "What we're doing with our BSP bills is to manage liquidity for the system as a whole, not necessarily to manage liquidity of a particular market," Remolona said. BSP Assistant Governor Zeno Ronald Abenoja said the decision to focus on the BSP bills was aimed at making monetary operations more stable and predictable. Using shorter maturities requires more frequent issuances, which can be less stable, he explained. He added that unlike the Term Deposit Facility (TDF), BSP bills can be traded in the secondary market, offering banks more flexibility with regard to their excess reserves. "[W]hen banks are holding their excess funds with us for the TDF, then they're locked into that facility," Abenoja said. "But if they're holding BSP bills, then there's liquidity to that in the secondary market. So that also helps them in terms of flexibility in holding those excess reserves over a short period." To date, the central bank has siphoned off P1.768 trillion in excess money supply as of end-September, P804 billion of which via BSP bills. Read The Rest at :