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BSP: Market favors short-term TDF

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According to the Bangko Sentral ng Pilipinas (BSP), during the auction on Wednesday, the market favored the 7-day TDF over the 14-day TDF.

The PHP200 billion 7-day TDF was fully granted by the central bank after receiving bids that were higher than the offer’s PHP206.8 billion value.

The shorter tenor’s average yield increased this week from the previous auction’s rate of 6.2466 percent to 6.2860 percent.

However, bids for the 14-day paper fell short of the PHP 160 billion bid on this particular day of bidding.

Only PHP155.79 billion worth of bids were submitted for the extended tenor TDF. With a yield that was also greater than the previous week, BSP accepted the entire proposal.

In comparison to the preceding action’s yield of 6.3323 percent, the average rate for the 14-day TDF was 6.3803 percent.

“The 50 basis point rate hike by the BSP last December 15th was passed through in the TDF auction results. Along with a desire for cash during the impending holidays, a tendency for the shorter tenor was also noted “In a statement, BSP deputy governor Francisco Dakila Jr.

Dakila continued by saying that the central bank’s actions would continue to be determined by its evaluation of the most recent market developments and liquidity conditions.

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