NextGen Day

MANILA, Philippines — Domestic liquidity, according to a Bangko Sentral ng Pilipinas (BSP) official, is still strong and can support credit demand, as evidenced by under-subscriptions during the term deposit facility (TDF) auction on Wednesday, despite decreased offer volume.

According to data supplied by the BSP, rates for both one-week and two-week facilities increased.

The BSP reduced the seven-day TDF offer volume to PHP140 billion from PHP180 billion last week and the 14-day TDF offer volume to PHP180 billion from PHP250 billion.

The auction committee accepted all of the offers for the one-week facility, which totaled PHP102.146 billion. The bid coverage ratio was 0.7296 at the time.

During the auction on April 20, the average rate jumped to 1.9595 percent from 1.9438 percent.

The auction committee accepted all bids for the 14-day TDF, which totaled PHP174.178 billion. The bid coverage ratio was 0.9677 at the time.

The facility’s average rate increased to 1.9680 percent from 1.9245 percent last week.

BSP Deputy Governor Francisco Dakila Jr. said in a statement that yields accepted for the one-week TDF “remained virtually steady at a range of 1.8500-2.1800 percent,” but that yields accepted for the two-week facility “moved upward to between 1.8400-2.3900 percent.”

“The TDF auction’s under subscriptions could be ascribed to increased credit activity as well as planned finance requirements for tax payments and government spending.” Nonetheless, the financial system’s liquidity is sufficient to support the surge in loan demand,” he remarked.

He went on to say that the central bank “would continue to monitor the latest liquidity conditions and market developments in its monetary operations strategy moving forward.”

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