The Bankers Association of the Philippines (BAP) cautioned its members against speculative currency transactions spurred by the financial problems of other economies.
Speculative currency trading goes against BAP policy, the association said.
It noted that the Bangko Sentral ng Pilipinas (BSP) will coordinate with banks on solutions that ensure order in the market.
"As a policy matter all the banks agree that they will assist in the financing of legitimate flows and they will not participate in speculative flows. I think people should be aware that the last thing we need in the country is a speculative attack on anything," BAP president Aurelio Montinola III said Thursday.
BSP Governor Amando Tetangco Jr. confirmed Thursday that based on its monitoring reports some of “the significant flows into the foreign exchange market have been of the speculative nature."
To track the forex flows more closely and curb speculation, the BSP last June required banks to file daily reports — instead of weekly — on their forward contracts.
“We are now working with the banks to come up with market-based solutions to arrest these speculative flows and ensure that market conduct is orderly at all times," Tetangco said.
"Parallel to this effort, we are reviewing prudential limits in consonance with the overall reform in the international regulatory standards for capital and liquidity," Tetangco said in his keynote address at the 3rd Corporate Treasury and CFO Summit in Makati City. — ELR/VS
