BSP changes volume offer for term deposits this week

MANILA -- Term deposit facility offering for the auction today remains at P90 billion but the Bangko Sentral ng Pilipinas (BSP) made some changes on the volume offering per tenor.

In an advisory, the central bank said the seven-day facility will be offered this week for PHP20 billion, lower than the PHP30 billion last week.

Offering for the 28-day facility was adjusted to PHP40 billion from PHP30 billion last week.

On the other hand, the 14-day facility will still be offered for PHP30 billion, same as last week.

Last week, all tenors received bids that were higher than the offered volume.

Rates of all tenors declined relative to the previous week’s auctions but all tenors were oversubscribed.

BSP Assistant Governor Iluminada Sicat said this “reflected in part banks’ preference to place their funds in the BSP’s deposit facilities ahead of the implementation of the reduction in reserve requirements on November 1, 2019 (as announced on 27 September 2019) and the increase in available liquidity in the financial system owing to higher disbursements by the national government (NG).”

The upcoming implementation of another cut in banks’ reserve requirement ratio (RRR) will bring the total reduction on RRR to 300 basis points.

From May to July this year, banks’ RRR was slashed by a total of 200 basis points, which was in line with the BSP’s bid to reduce it to single digit by 2023 to make it at par with those of other countries in the region. (PNA)