NextGen Day

MANILA – The average rate of the Bangko Sentral ng Pilipinas’ (BSP) 28-day bills climbed on Friday, the day the central bank’s policy rate was raised by 25 basis points.

The rate of debt securities jumped to 2.3183 percent from 2.1747 percent during the auction on May 13, according to data issued by the central bank.

The BSP increased the offer volume to PHP140 billion from PHP130 billion the previous week.

From a total of PHP172.945 billion in tenders, the auction committee made a full award. 1.2353 was the bid coverage ratio.

The range of yields in this week’s securities auction “moved upward and widened to a range of 2.0875 to 2.4950 percent,” according to BSP Deputy Governor Francisco Dakila Jr. in a statement.

“The outcomes of the 28-day bill auction reflect in part the BSP policy rate hike of 25 basis points that took effect today. Despite this, liquidity in the financial sector remained plentiful, according to Dakila.

“Monetary operations will continue to be guided by its assessment of the latest liquidity conditions and market developments,” he added.

The BSP’s policy-making Monetary Board raised the key policy rate on Thursday, citing the domestic economy’s continued recovery in the first quarter of the year and the expected rise in domestic inflation, which is due in part to the impact of rising oil and commodity prices in the international market.

The overnight reverse repurchase (RRP) rate, which was at a record-low 2% before the rate hike, is now at 2.25 percent, following a 200 basis point drop in the BSP’s key rates in 2020 as part of the BSP’s pandemic-related actions.

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