NextGen Day

The newly offered 56-day Bill of the Bangko Sentral ng Pilipinas (BSP) attracted strong demand after bids were more than twice the PHP20 billion initial offering, but the 28-day tenor was undersubscribed.

The auction committee made a full award for the freshly offered securities after bids reached PHP41.645 billion, central bank data released on Friday showed.

The average rate of the debt paper stood at 6.6442 percent, with the accepted yields ranging from 6.6000 percent to 6.6900 percent.

On the other hand, the 28-day tenor, which was offered for PHP140 billion, higher than last week’s PHP120 billion, only attracted bids amounting to PHP93.995 billion.

The auction committee accepted PHP92.995 billion.

The average rate of this tenor rose to 6.6562 percent from last week’s 6.6370 percent.

In a statement, BSP Deputy Governor Francisco Dakila Jr. said the “results of today’s auction came as market participants shifted some of their funds to the 56-day BSP Bills while also tending to end-of-month requirements.”

“As always, the BSP’s monetary operations will continue to be guided by its assessment of prevailing liquidity conditions and market developments,” he added.

The BSP said the additional tenor in the BSP securities was part of the bid to enhance the central bank’s monetary operations under its Interest Rate Corridor framework.

“The introduction of the 56-day BSP Bill expands the range of BSP’s term instruments and increases the BSP’s flexibility to respond to changing liquidity conditions while providing additional guidance to short-term market interest rates,” it said.

It added that offering the new tenor “supports the BSP’s efforts towards a more flexible and market-based approach to managing liquidity in the financial system, in line with its overall thrust to promote price and financial stability.”

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