BSP offers ₱150 B TDF at auction today

The central bank will offer ₱150 billion 7-day tenor today for the weekly auction of its term deposit facility (TDF), higher than the previous week’s ₱120 billion.

The Bangko Sentral ng Pilipinas (BSP), which cancelled the TDF auction of the other two tenors, the 14- and 28-day on March 18, has been slowly building up the liquidity of the lone TDF since it has resumed its offer last April 15 with only ₱30 billion.

Before the COVID-19 lockdown, the TDF volume for all three tenors combined range from ₱130 billion to ₱200 billion.

During last Wednesday’s auction, bids for the 7-day reached ₱242.05 billion versus offer of ₱120 billion. This was higher compared to May 13’s total tenders of ₱231.35 billion. The average rate stood at 2.2543 percent, down from the previous auction’s 2.3135 percent.

The shortest-dated TDF is the only tenor up for bids, still benching the other two tenors while on modified enhanced community quarantine (MECQ) to manage BSP’s liquidity siphoning off tools.

BSP Governor Benjamin E. Diokno said temporarily suspending certain TDF tenors is part of their crisis response measures.

“When the coronavirus crisis arrived, the government had and continue to have adequate fiscal and monetary policy space which it immediately deployed to calm down the market and ease liquidity pressures. On its part, the BSP promptly implemented measures to ease liquidity, and sustain flow of credit that have calmed down market jitters,” said Diokno last week.