BSP issues new rules for holiday operations

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Title Bangko Sentral ng Pilipinas Issues New Rules for Holiday Operations Ensuring Uninterrupted Delivery of Essential Central Bank Functions

The Bangko Sentral ng Pilipinas (BSP) has recently updated its standard operating procedures (SOP) for holidays and work suspensions to ensure the uninterrupted delivery of essential central bank functions. This move aims to promote stability in the country's financial markets, guaranteeing that the banking system remains functional despite disruptions.

New Rules Enhanced Operational Continuity

The BSP has issued Memorandum M-2025-028, which takes effect immediately. The revised SOP amends previous procedures and is designed to maintain the operations of the central bank's large-value payment system and support overall market stability.

Under the new rules, the BSP remains open for business on Philippine holidays, including local holidays and government-declared work suspensions. However, there are exceptions when Malacañang declares a nationwide regular or special nonworking holiday for the public and private sectors, or when the BSP governor or officer in charge suspends operations due to safety risks, the breakdown of critical utilities, or other major disruptions.

Advisories and Exemptions

In extraordinary cases where operations are suspended, advisories will be issued by the BSP's communication office and concerned departments. These advisories will ideally be released on the day before, or no later than 8 a.m. on the same day of suspension. For suspensions that take effect after 8 a.m., advisories will be released at least one hour prior to implementation.

Essential Operations Continue

The revised SOP identifies specific operations required on holidays and public/private work suspensions

Monetary and foreign exchange operations, including the trading and settlement of BSP transactions managed by the Financial Markets unit.
Preparation of the daily Reference Exchange Rate Bulletin.
Peso Real-Time Gross Settlement through the Philippine Payments and Settlements System.
Cash services, including currency deposits and withdrawals.
Check-clearing teller transactions.

System administration functions carried out by BSP regional offices and branches will also continue to operate.

Reserve Days Simplified Calculations

The holidays when all these activities proceed will be considered a Reserve Day – or the specific period used for calculating a bank's reserve requirements. This simplifies calculations for banks and promotes operational continuity.

Alignment with Financial Market Infrastructures

The BSP has emphasized that relevant financial market infrastructures and industry associations are expected to align their operations with the central bank's essential functions, including

The Bureau of Treasury for government securities settlement.
Bankers Association of the Philippines for foreign exchange and derivatives trading.
Philippine Dealing & Exchange Corp. for fixed-income trading.
Money Market Association of the Philippines for government securities repo transactions.
Philippine Depository & Trust Corp. for equities and fixed-income depository settlements.
Philippine Clearing House Corp. for check image clearing, PESONet, USD/PHP payment versus payment, and domestic dollar transfers.

Improved Capacity Enhanced Stability

The new SOP reflects the BSP's improved capacity to perform critical operations across different scenarios and work arrangements, ensuring that the financial system continues to operate smoothly despite disruptions. This move demonstrates the central bank's commitment to maintaining stability in the country's financial markets.

In conclusion, the revised SOP issued by the BSP aims to guarantee uninterrupted delivery of essential central bank functions during holidays and work suspensions. With this new rule in place, the banking system is better equipped to handle any disruptions that may arise, ensuring a smoother operation for all stakeholders involved.

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Keywords* Bangko Sentral ng Pilipinas (BSP), holiday operations, standard operating procedures (SOP), central bank functions, financial markets, stability.

Edward Lance Arellano Lorilla

CEO / Co-Founder

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