BSP squeezes out only ₧334.785B from system

THE Bangko Sentral ng Pilipinas (BSP) partially awarded Term Deposit Facilities (TDFS) as investors preferred shorter tenors during the auction on Wednesday.

The BSP lowered the volume offering for the TDF auction to P350 billion from P390 billion last week. The total offer volume was also reallocated between the 7-day and 14day tenors at P190 billion from P220 billion and P160 billion from P170 billion, respectively.

However, only the 7-day TDF was oversubscribed, with the respective bid-to-cover ratios (BCR) for the 7-day and 14-day TDF at 1.365x and 0.905x. BSP said, nonetheless, that total tenders received reached P404.159 billion, within the BSP’S expected volume range.

“The results of the TDF auction came as eligible counterparties reallocated their placements towards the shorter tenor as part of their efforts to manage liquidity in anticipation of some client requirements,” BSP Deputy Governor Francisco G. Dakila Jr. was quoted in a statement as saying.

“Moving forward, the BSP’S monetary operations will remain guided by its assessment of the latest liquidity conditions and market developments,” he added.

BSP said of the total bids received, some P334.785 billion were accepted. The BSP awarded P190 billion from P259.374 billion in bids in the 7-day tenor and accepted P144.785 billion in the 14-day tenor.

The data showed that the weighted average interest rates (WAIR) for the awarded bids in both tenors declined from the previous week.

The WAIR for the 7-day TDF fell by 5.7976 basis points (bps) to 6.2973 percent whereas that for the 14-day TDF fell by 2.4717 bps to 6.3733 percent.

The yields accepted for the 7-day tenor shifted lower and widened to 6-6.4 percent, while that for the 14day tenor widened to 6.15-6.5088 percent.