Mixed results for TDF

Term deposits fetched mixed results yesterday as rates for the seven-day tenor eased further, while that of 14and 28-day tenors rose slightly amid the spike in COVID-19 confirmed cases, according to the Bangko Sentral ng Pilipinas (BSP).

Dennis Lapid, director of the BSP’s Department of Economic Research (DER), said results of the term deposit facility (TDF) auction reflected continued strong market interest for the deposit facilities of the central bank.

“The results of the auction reflect continued strong market interest for the BSP’s deposit facilities, with preference toward longer-tenor TDF amid ample liquidity conditions in the financial system,” Lapid said.

Lapid said the yield of the seven-day term deposits eased by 0.35 basis point to 1.7538 percent yesterday from last week’s 1.7573 percent.

On the other hand, Lapid said the 14-day tenor increased by 0.26 basis point to 1.7548 percent from 1.7522 percent, while that of 28-day term deposits inched up by 0.16 basis point to 1.7578 percent from1.7562 percent.

Furthermore, cash-rich banks continued to swarm the liquidity absorption facility of the BSP as it parked their excess funds due to lack of interest from corporate and individuals for new loans due to the health crisis.

Tenders amounted to P483.21 billion higher than the increased volume of P370 billion as all three tenors were oversubscribed.

Bids for the seven-day tenor reached P211.7 billion or higher than the P120 billion offering, while tenders for the 14-day term deposits amounted to P172.24 billion or almost double the increased volume of P90 billion.

On the other hand, bids for the re-opened 28-day term deposits amounted to P99.26 billion or more than double the P40 billion offering.

“Looking ahead, the BSP will remain guided by its assessment of prevailing market conditions and financial liquidity in determining the volume and tenors of its TDF operations,” Lapid said.