MANILA -- Banks submitted more than twice the volume offer for the Bangko Sentral ng Pilipinas’ (BSP) term facilities Wednesday, even as rates declined.
Data released by the BSP showed that the rate of the seven-day facility slipped to 4.5537 percent from 4.6240 percent during the auction last June 26.
The rate of the 14-day facility went down to 4.6129 from last week’s 4.7002 percent.
The BSP offered the 28-day TDF this week and its rate averaged at 4.6347 percent.
All the tenors were offered for PHP10 billion but tenders for the seven-day TDF reached PHP25.42 billion, the 14-day to PHP22.095 billion and the 28-day to PHP20.033 billion.
Last week, tenders for the seven-day facility was lower at PHP14.41 billion and the 14-day at PHP16.997 billion.
Thus, the bid coverage ratio for the shortest tenor facility improved to 2.5420 and the 14-day to 2.2095. Bid coverage ratio of the 28-day TDF stood at 2.0033.
BSP Governor Benjamin E. Diokno attributed the higher bids this week to increased liquidity due to some extent to the cut in banks’ reserve requirement ratio (RRR).
He, however, noted that there was also a time when the facilities were undersubscribed, which he traced to bankers' concerns over the latest economic developments.
He, thus, advised bank executives not to worry too much because “the economy is doing well.” (PNA)
