THE Bangko Sentral ng Pilipinas (BSP) wants universal and commercial banks to submit regular reports on their fund transfer pricing (FTP) or transfer pool rate (TPR) mechanisms to tighten oversight of interest rate and liquidity risks.
In a draft circular, the BSP said it is “keenly interested in monitoring how banks respond to changes in the interest rate environment and implement good governance in the management of their interest rate and liquidity exposures. The formalization of this reporting requirement shall facilitate this process.”
FTP is an internal accounting system used by banks to determine the profitability of various business units, such as branches, product lines, and customer relationships. It acts as a “price tag” for funds transferred internally between a bank‘s divisions — between those that gather deposits and those that issue loans.
TPR is a specific FTP methodology, often referred to as a “pool-based approach” or “single pool rate.”
The FTP/TPR reports would be classified under the “Primary Reports” category in the Manual of Regulations for Banks (MORB). The measure also introduces amendments to Section 152, Appendix 7, and Appendix 71 of the MORB to incorporate the new submission requirement.
Under the draft rules, banks must submit the report monthly within five banking days after the end of each reference month. The report is sent through the BSP Prime Reporting Innovation and Monitoring Engine, or Prime system.
FTP or TPR mechanisms draw clear lines of authority and accountability to ensure that exposures remain within board-approved risk appetite levels.
The BSP circular also requires banks to disclose details of their FTP/TPR methodologies, including the basis for pricing, adjustment factors, and formulas used in determining rates.
Lenders must likewise report actual FTP/TPR figures across specified tenors, ranging from one day to as long as 10 years, along with explanations for any strategy-driven changes or revisions in methodology.
The reports will undergo a one-month pilot implementation covering the April 30, 2026 reference period.
After the pilot phase, all universal and commercial banks are required to submit their reports monthly.
Niña Myka Pauline Arceo
