MANILA – Rate of the Bangko Sentral ng Pilipinas’ (BSP) seven-day term deposit facility (TDF) declined anew Wednesday still due to strong demand.
BSP offered the facility for PHP100 billion and the auction committee made a full award. Bids were more than twice at PHP231.35 billion.
Average rate of the facility declined to 2.2578 percent from 2.2654 percent last week.
Bid coverage ratio fell to 2.3135 from last week’s 2.5889 when the facility was offered for PHP70 billion and bids totaled to PHP181.22 billion.
In a statement, BSP Deputy Governor Francisco Dakila Jr. said the TDF rate fell by 0.76 basis points this week compared to the auction last May 6.
This drop, he said, is “consistent with current ample liquidity in the financial system and market preference for safe, highly liquid assets.”
“Looking ahead, the BSP will continue to assess prevailing financial system liquidity in determining the appropriate size and tenors in its TDF auction,” he added.
BSP started offering the seven-day TDF on April 15 while auctions were canceled last April 1 and April 8.
BSP did not push through with the scheduled TDF auctions last March 18 and March 25 after Malacanang placed Metro Manila under a community quarantine effective March 15 as a precautionary measure against the spread of the coronavirus disease 2019 (Covid-19).
The lockdown was changed to an enhanced community quarantine (ECQ) that covered the mainland Luzon from March 17 until May 15, 2020. (PNA)
