NextGen Day

The term deposit facility (TDF) rates of the Bangko Sentral ng Pilipinas (BSP) fell on Wednesday, but demand remained robust, resulting in continuous oversubscription.

The average rate of the shorter-tenor facility, which is one of the BSP’s tools for removing excess liquidity from the financial system, fell to 1.7128 percent, while the two-week facility fell to 1.7259 percent, according to data issued by the central bank.

During the auction on January 12, these were 1.7232 percent and 1.7487 percent for one-week and two-week facilities, respectively.

The BSP increased the offer volume for both tenors by PHP20 billion, bringing the one-week TDF to PHP220 billion and the two-week facility to PHP290 billion. Both were properly compensated.

The one-week TDF received a total of PHP253.606 billion in tenders, resulting in a bid coverage ratio of 1.1528.

The two-week facility received bids totaling PHP449.684 billion, resulting in a bid coverage ratio of 1.5506.

The huge volume of bids during the TDF auctions so far this year, according to BSP Deputy Governor Francisco Dakila Jr., might be attributed to the normalization of domestic liquidity following the Christmas season.

“The BSP’s monetary operations will continue to be guided by its assessment of the most recent liquidity conditions and market development,” Dakila added.

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