NextGen Day

On Wednesday, the rates of the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) fell, with large bids for both tenors.

The average rate of the seven-day facility, which is one of the BSP’s surplus liquidity mopping instruments, fell to 1.7071 percent, while the 14-day facility fell to 1.6787 percent, according to data issued by the central bank.

During the auction on February 2, these were at 1.7413 percent for the one-week facility and 1.6899 percent for the two-week facility.

The BSP reduced the offer volume for the seven-day TDF from PHP220 billion last week to PHP190 billion, and the auction committee made a full award.

The total amount of tenders received was PHP266.79 billion, resulting in a bid coverage ratio of 1.4042.

The offer volume for the 14-day TDF, on the other hand, was increased to PHP360 billion from PHP330 billion last week.

The total amount of bids received was PHP399.432 billion, with a bid coverage ratio of 1.1095.

Accepted yields for the shorter-dated facility in this week’s auction “shifted slightly higher but narrowed to a range of 1.6175-1.7500 percent,” according to BSP Deputy Governor Francisco Dakila Jr. in a statement.

The two-week facility produced the same result after shifting higher but narrowing to a range of 1.6250 to 1.7000 percent, according to Dakila.

The results of this week’s TDF auction, he said, “reflect the financial system’s continued normalization amid ample liquidity.”

“The longer tenor appears to be preferred by market participants,” he added. “In the future, the BSP’s monetary operations will be guided by its assessment of current liquidity conditions and market developments,” says the statement.

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