Philippine central bank eyes uniform loan pricing benchmark in 2014

It’ll reportedly be similar to UK’s LIBOR.

The central bank of the Philippines (BSP) is reportedly going to set a uniform market-based benchmark to price loans and will issue a circular within the year.

According to a research note from Maybank Kim Eng, the new benchmark is said to be similar to the UK’s LIBOR, which is the average interest rate for banks’ overnight transactions.

The report said the proposal is currently under review as the BSP waits for comments from banks.

Maybank Kim Eng noted that, at present, lenders use different benchmarks such as the 91-day Tbill which at the last auction was at 1.2 percent, or the SDA rate, pegged at 2.25 percent.