Fixed-term deposits of Philippine government-owned corporations

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By LEE C. CHIPONGIAN
Manila Bulletin

Fixed-term deposits of government-owned and controlled corporations (GOCCs) with the Bangko Sentral ng Pilipinas (BSP) increased by 340 percent to P20.6 billion as of end-April, from P4.7 billion in end-December.

The BSP has been closely monitoring GOCCs and government financial institutions (GFIs) money placements with the central bank to control expansion of domestic liquidity, said sources.

To increase or reduce liquidity in the financial system, the BSP accepts fixed-term deposits. It also has open market operations such as special deposit accounts (SDAs) and other standing facilities which it could use to siphon off excess liquidity in the market. The SDA facility consists of fixed-term deposits with the BSP and in 2007, it expanded access by allowing trust entities to deposit in SDAs in order to better manage liquidity in the face of strong foreign exchange inflows.