The Securities and Exchange Commission (SEC) has announced an expansion of the government securities repurchase agreement (Repo) market to include non-bank financial institutions, significantly broadening participation beyond the previously eligible dealers. This development, unveiled on Tuesday, is meant to enhance liquidity, short-term funding management, and overall market activity.
Since taking over direct oversight of the market in 2020, the SEC has focused on stabilizing repo operations and ensuring compliance across participants. According to SEC chairman Emilio B. Aquino, the expansion supports government securities dealers’ market-making activities and provides new opportunities for growth.
“The repo market is envisioned to support the market-making activities of government securities dealers in the country. Expanding this market provides us with another opportunity to improve liquidity, manage short-term funding, and boost overall market activity,” Aquino said.
In 2024, the SEC played a key role in advocating for the expansion of the documentary stamp tax exemption for all derivative market participants, which culminated in the Bureau of Internal Revenue’s issuance of Revenue Memorandum Circular No. 125-2024. This regulation amended a prior tax policy and helped introduce a functioning repo market in the Philippines.
Additionally, the SEC collaborated with the Bankers Association of the Philippines and the Asian Development Bank to host a well-attended GMRA-Based Repo Workshop. The event, which attracted over 600 participants from February 19-21 at the SEC’s headquarters in Makati, was designed to equip stakeholders with the tools needed to successfully implement the GMRA framework and navigate the new market dynamics.
Looking ahead, the SEC is actively identifying a self-regulatory organization to support the long-term sustainability of the Philippine repo market, signaling its continued commitment to fostering a robust and diversified financial environment.
