• TDF rates end mixed

Interest rates on shorter- and longerdated term deposits were mixed in yesterday’s auction as the 29-day debt instrument remained undersubscribed despite the lower volume.

The yield of the seven-day term deposits eased to 3.3664 percent yesterday from last week’s 3.3678 percent with accepted rates ranging from 3.22 to 3.4 percent.

On the other hand, the 29-day term deposits fetched a higher rate of 3.4939 percent from 3.4907 percent last week as accepted yields ranged between 3.45 and 3.5 percent.

Bids for the shorter-dated term deposits reached P53.54 billion and made a full award of P40 billion, while the longer-dated term deposit offering of P100 billion attracted P94.83 billion worth of tenders.

The BSP has slashed the volume of the term deposit auction facility (TDF) to P140 billion as it lowered the size for the longer-dated term deposits to P100 billion from P110 billion, but retained the volume of the shorter-dated term deposits at P40 billion starting yesterday.

Last September, the central bank reduced the volume of the facility for the first time since it was introduced in June last year to P150 billion from the previous size of P180 billion. It slashed the volume for the 28-day term deposits to P110 billion instead of P140 billion.

BSP Deputy Governor Diwa Guinigundo said banks continued to diversify their asset deployment as shown in the renewed interest in the TDF.

“I believe banks continue to diversify their asset deployment. Since loans continue to grow and investments could have been maxed and foreign exchange requirements could have also been sustainably met, there seems to be renewed interest in TDF,” he said.

He explained banks continue to go short for any promising opportunity resulting in lower yield for the preferred seven-day term deposits.