Banks swarm TDF auction; rates ease

Banks swarmed yesterday the term deposit auction facility (TDF), resulting in lower yields for the debt instrument.

Interest rates on shorterand longer-dated term depos- its were mixed at Wednesday’s auction as the 29-day debt instrument remained undersubscribed despite the lower volume.

The seven-day term deposits fetched a lower rate of 3.3554 percent from 3.3664 percent last week with accepted rates ranging from 3.23 to 3.38 percent.

On the other hand, the yield of the 28-day term deposits eased to 3.4925 percent from last week’s 3.4939 percent as accepted yields ranged between 2.5 and 3.5 percent.

The shorter-dated term deposits remained oversubscribed with tenders reaching P64.07 billion. The BSP auction committee made a full award of P40 billion.

Likewise, the longer-dated term deposit offering of P100 billion was also oversubscribed as bids reached P102.88 billion.

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.