The Bangko Sentral ng Pilipinas (BSP) is moving to tighten its oversight of how the nation’s largest lenders price their loans and deposits, proposing a new mandate for monthly reports on internal funding costs to better gauge the impact of its monetary policy.

The central bank released a draft circular outlining a requirement for universal and commercial banks to submit monthly data on fund transfer pricing, or FTP. The mechanism, also known as the transfer pool rate, is a critical internal accounting tool used by banks to assign costs or credits to different business units based on their use or provision of liquidity.

By formalizing these reports, the BSP said the central bank aims to gain a more granular view of how market interest rate shifts are transmitted through the financial system.

According to the draft, the reporting requirement is designed to support the BSP’s dual mandate of price and financial stability. Policy makers noted that closer monitoring will help the regulator assess whether banks are implementing sound governance in managing their interest rate and liquidity exposures.

Under the proposed guidelines, the reporting process will be integrated into the BSP Prime Reporting Innovation and Monitoring Engine, or PRIME, system. The regulator plans to initiate a pilot phase in April 2026 to allow banks to calibrate their systems. Once the permanent reporting cycle begins, lenders will be required to submit their data within five banking days following the end of each reference month.

The reporting framework consists of two primary components. The first requires banks to provide a detailed narrative of their internal pricing methodologies, while the second involves a quantitative breakdown of actual interest rates across various tenors and time periods. This dual approach is intended to provide regulators with both the “how” and the “what” of bank pricing strategies.

Furthermore, the BSP is emphasizing the need for robust internal governance. The draft rules mandate that banks clearly define their internal policies to ensure that risk exposures remain within limits approved by their respective boards. This focus on internal controls is part of a broader effort by the BSP to fortify the banking sector against volatility.

The central bank’s initiative comes as lenders navigate a complex interest rate environment, where the timing and magnitude of policy shifts have a direct impact on net interest margins and credit growth. By requiring these monthly disclosures in Philippine peso terms, the BSP is positioning itself to react more swiftly to emerging risks in the domestic credit market.