« Back    Next »

VI. Standard Transaction Volumes
  1. Treasury Bills or Bonds less than one year : Php 50 Mio
  2. Treasury Bonds longer than one year : Php 30 Mio

VII. Day Count Standards
  1. Treasury Bills : ACTUAL/360
  2. Treasury Bonds : 30/360 ISMA non end of month


VIII. Variance Over Best Bid
Acceptable variance over the best bid is 25 basis points for T-bills and 50 basis points for T-bonds.

The agreed variance will not apply from the best bid shown by a non-fixing bank. The next best bid from a fixing bank will be considered.


IX. Standard Premium For T-Bonds (less than one year)
For the expanded On-the-Run FXTNs that are less than one year, the following standard premium shall be added to the bid of the corresponding T-bill benchmark:

3 months25 basis points
6 months37.5 basis points
1 year50 basis points


X. Quotations
  1. Quotations for Government Securities shall be expressed in terms of gross Yield to Maturity (YTM) up to 4 decimal places
  2. All eligible on-the-run issues are subject to mandatory bid quotes among Fixing Banks


XI. Preliminary Negotiation Of Terms
Any qualifying condition for a transaction should be clearly stated in the preliminary negotiation of terms. This will minimize future disputes about transactions, which do not meet either the bank's conditions or the broker's.

Examples of such qualification are

a) Credit approval has to be cleared
b) The transaction must be matching in every respect
c) The transaction is contingent to the bank being able to execute an associated transaction
d) The transaction is subject to the execution of a hedge transaction

Banks should complete deals as quickly as possible and both the bank and the broker have to keep each other informed of progress, possible delays or any change in the terms.


XII. Mechanics Of Trade
  1. All Fixing Banks shall update their respective contributor pages by the start of morning and afternoon trading and update them as necessary throughout the trading day.
  2. Fixing Banks are obliged to quote a firm bid to other Fixing Banks on all On-the-Run issues for at least the minimum trading lot when called subject to counterparty limits.
  3. For expanded On-the-Run issues, quoted bids should at least be the same as the bid for the benchmark issue.
  4. A quote made through the designated trading system is considered firm among Fixing Banks for all issues unless:
    1. Changed or cancelled by the quoting bank before it is dealt;
    2. For Off-the Run issues, the indicated volume is zero
  5. Any Fixing Bank who requests for a firm quote is the "calling party". The Fixing Bank called who shall provide such firm quote(s) to the calling party is otherwise known as the "called party". The calling party may propose a counter quote to the called party, which the called party may deal at its option. At this instance, the respective roles of such parties become reversed, i.e., the calling party becomes the called party and vice versa.
  6. The calling party when asking for a quote must specify either the specific issue or the benchmark and optionally the volume in terms of face amount of the GS he/she is interested in dealing in.
  7. Once the bid price is dealt, the quoting bank should immediately update its price otherwise the same level will be assumed dealable.
  8. The called party must respond and provide a firm quote within a reasonable period of time. The calling party must likewise respond within a reasonable period of time to deal a quoted price. If no deals are done on an initial quote, the called party has the right to request the calling party for his quote.
  9. If a given quote is deemed as off-market, the calling party shall clarify with the quoting party the firmness of said quote. If the quoting party maintains such quote, then that quote shall be deemed firm and dealable.
  10. For transactions dealt outside the designated trading system (i.e. through brokers), it shall be the responsibility of the seller to ensure that the transaction is mapped through the designated trading system.
« Back    Next »