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TDF pricing is fluctuating due to high demand.

MANILA – On Wednesday, the Bangko Sentral ng Pilipinas (BSP) cut the offer volume for the two-week term deposit facility (TDF) due to “limited system liquidity,” although both tenors were oversubscribed, and rates were uneven.

The offer volume for the seven-day TDF remained at PHP100 billion, while the two-week facility was reduced to PHP140 billion from PHP170 billion the previous week. Both tenors received full payment.

The seven-day facility’s average rate remained nearly steady at 1.9599 percent, down from 1.9597 percent during the auction last May 4, while the two-week facility’s cost fell to 2.0287 percent from 2.0352 percent last week.

The one-week facility received a total of PHP150.945 billion in tenders, resulting in a bid coverage ratio of 1.5095.

The bid coverage ratio for the two-week TDF was 1.1543, with bids totaling PHP161.602 billion.

Accepted yields for the one-week TDF “moved higher but narrowed to a range of 1.9200-1.9827 percent,” according to BSP Deputy Governor Francisco Dakila Jr., while accepted rates for the two-week facility “changed lower and narrowed somewhat to 1.9000-2.2500 percent.”

“The TDF auction results suggest a normalization of liquidity conditions in the banking sector, notwithstanding considerable supply.” The BSP’s monetary operations would continue to be guided by its assessment of current liquidity conditions and market developments in the future,” he said.

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