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New increases in BSP term deposit facility rates

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On Wednesday, interest in the shorter-dated tenor of the Bangko Sentral ng Pilipinas (BSP) term deposit facility increased once more.

According to data made public by the central bank, the average rate for the seven-day facility increased during the auction on November 29 from 5.7514 percent to 5.9346 percent.

The 14-day facility’s average rate increased slightly from last week’s 5.8662 percent to 6.0050 percent.
The BSP increased the offer volume for the one-week facility from last week’s PHP180 billion to PHP220 billion.

After bids reached PHP226.057 billion, this project was fully awarded.
Additionally, the volume offering for the two-week facility was raised from PHP150 billion to PHP180 billion.

However, the number of bids received—PHP166.534 billion—was undersubscribed.

Awarded by the BSP was PHP166.334 billion.
The central bank stated that the overall bids in this week’s TDF auction “were well within the BSP’s estimated range of volume” despite the reduced offers for the two-week facility.

Francisco Dakila Jr., deputy governor of the BSP, stated in a statement that “yields accepted for both tenors equally shifted higher.”

However, he added, “the 14-day tenor widened to 5.7500-6.3500 percent, while the seven-day tenor narrowed to a range of 5.7000-6.1250 percent.”

Following the release of the November CPI (consumer price index) statistics and with a policy decision from the BSP anticipated on December 15, Dakila attributed the rate increases to “counterparties’ desire for the shorter tenor.”

The domestic inflation rate has accelerated further, according to the Philippine Statistics Authority (PSA), reaching an all-time high of 8% in November last year.

This outcome is anticipated to lead to another increase in the key policy rates this month at the central bank.

In the future, the BSP’s monetary operations would continue to be directed by its evaluation of the most recent market developments and liquidity conditions, said Dakila.

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