NextGen Day

The 28-day bills of the Bangko Sentral ng Pilipinas (BSP) experienced undersubscription on Friday, and their rate increased one day after the central bank increased its benchmark rates once more.

Data from the central bank revealed that during the auction on March 17, the average rate of the debt paper increased to 6.7650 percent from 6.6633 percent.

The BSP cut the offer volume from PHP170 billion last week to PHP150 billion, but only PHP130.74 billion in tenders were received.

The yields accepted in this week’s securities auction, according to a statement from BSP Deputy Governor Francisco Dakila Jr., were “higher and widened to a range of 6.6620 to 7.0000 percent.”

“The results of the auction came as eligible participants at the end of the quarter and during the Holy Week holidays prepared for client requirements,” he said.

According to Dakila, the central bank will continue to base its monetary operations on its evaluation of the current liquidity landscape and market developments.

In response to the elevated inflation rate, which is anticipated to revert to within-target 2 percent to 4 percent levels by the fourth quarter of 2023, the Monetary Board (MB), which sets policy at the central bank, increased the BSP’s key rates by 25 basis points on Thursday.

This increased the overnight reverse repurchase (RRP) rate from a record low of 2 percent in 2020 to 6.26 percent.

The rate of price increases decreased from a 14-year high of 8.7 percent in January to an average of 8.6 percent in the first two months of this year after February.

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