BSP: Interbank repo market set to overtake FX swaps this year

DUMAGUETE CITY — The Philippine interbank repo market is growing “very fast” and could overtake foreign exchange (FX) swaps before the end of the year, Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said.

“I see very encouraging signs in the development of these markets. The money market, in the form of repo contracts, is growing rapidly. Almost nothing a year and a half ago is now around P100 billion in transactions,” he told reporters.

“I think it won’t be long before it surpasses the FX swap market and makes the FX swap market redundant,” he added.

Data from the BSP show FX swaps stood at P146.65 billion as of October 2025, while the interbank repo market reached P111.25 billion. In simple terms, the repo market is catching up fast to the FX swap market in daily trading.

The growth comes after the Bankers Association of the Philippines (BAP) launched an enhanced peso interest rate swap (IRS) in November, with 16 banks acting as market makers for the overnight reference rate (ORR).

“I think in terms of the money and bond markets, it’s very promising,” Remolona said. He added that the repo market could benefit if corporate bonds are made more accessible to smaller investors.

“We are talking to several partners and putting the roadmap together. We will implement something this year, but I’m not in a hurry to reveal exactly what,” he said.

Remolona also said the BSP is working to have peso-denominated government securities included in J.P. Morgan’s Government Bond Index-Emerging Markets (GBI-EM), a major global index.

The peso securities were placed on a “positive watchlist” in September, the last step before possible inclusion.

“Malapit na. Pinag-uusapan ngayon ang pricing convention kasi iba ‘yung sa atin kumpara sa ibang bansa,” he said.

“The reason our pricing is different is because of taxes and withholding taxes, but we’re starting to sort that out,” Remolona added.—MCG, GMA Integrated News