MANILA – Undersubscription was registered on Wednesday’s auction of the Bangko Sentral ng Pilipinas’ (BSP) Term Deposit Facility (TDF) but rates of all three tenors increased.
Rate of the seven-day facility improved to 4.5967 percent from 4.5629 percent during the auction last July 24.
The central bank offered this facility for PHP40 billion but banks submitted only PHP31.247 billion worth of tenders, which the auction committee fully accepted.
Bid coverage ratio of this tenor went down to 0.7812 from 0.9252 last week, when this attracted PHP27.755 billion worth of bids against the PHP30 billion offer.
Average rate of the 14-day facility increased to 4.6548 percent from 4.6277 percent last week.
The BSP offered this for PHP30 billion and bids amounted to PHP29.777 billion, which the auction committee also fully accepted.
Bid coverage ratio increased to 0.9926 from last week’s 0.5592. The BSP offered this tenor for PHP30 billion last week and tenders reached PHP16.776 billion.
Also, the rate of the 28-day facility increased to 4.6853 percent from 4.6495 percent last week.
It was offered for PHP30 billion and banks submitted PHP27.615 billion worth of bids. The auction committee accepted all tenders.
Bid coverage ratio slipped to 0.9205 from last week’s 1.0850, when this tenor was offered for PHP20 billion and tenders amounted to PHP21.7 billion.
Monetary officials have said that attractiveness of the facility, which is a liquidity-moping mechanism of the central bank, depends on banks’ outlook for their liquidity needs and other developments in the economy.
Later in the day, the Federal Open Market Committee (FOMC) will announce their rate decision after a two-day meeting while the BSP’s policy-making Monetary Board (MB) will have its rate setting meet on August 8.
Both central banks are expected to announce a slash in their respective key policy rates. (PNA)
