Benchmark switch leaves hedging headache for Philippine banks

If interest rates are cut before new benchmark docs are ready, banks face possible NII squeeze

Philippine banks have become used to managing without a fully functioning benchmark interest rate for peso swaps since the middle of last year. But there are concerns things could get more difficult if the central bank begins cutting rates before documentation for a new benchmark is in place.

“If we want to really push the market going forward, we need to have an active interest rate swap market for banks to be able to hedge their balance sheet, as well as a peso swap market, especially if risks