MANILA – The Bangko Sentral ng Pilipinas (BSP) resumed Wednesday the auction for the 28-day term deposit facility (TDF) and its rate, along with that of the seven- and 14-day facilities, declined as demand remained strong.
Data released by the central bank showed that the average rate of the seven-day TDF went down to 1.7573 percent from 2.2504 percent during the auction last June 24.
The BSP offered this tenor for PHP120 billion, the same as last week, and bids reached PHP232.3 billion.
The bid coverage ratio slipped to 1.9358 from week-ago’s 2.3206 when tenders amounted to PHP278.475 billion.
The average rate of the 14-day facility went down to 1.7522 percent from last week’s 2.2508 percent.
It was offered for PHP70 billion and tenders were more than double at PHP149.68 billion.
The bid coverage ratio is lower this week at 2.1383 from last week’s 2.8060 when this tenor was offered for PHP50 billion, and bids amounted to PHP140.3 billion.
Data indicated the rate of the 28-day facility declined to 1.7562 percent from 3.7436 percent when this tenor was auctioned last March 11.
The bid coverage ratio, however, increased to 2.9826 from 1.5963 after this week’s PHP20-billion offer was met with PHP59.651 billion.
This tenor was last offered for PHP50 billion and tenders reached PHP79.813 billion.
The BSP temporarily suspended offering this tenor as well as the 14-day facility after Luzon was placed under an enhanced community quarantine (ECQ) in the middle of March in a bid to monitor the situation.
It resumed offering the 14-day facility last June 10.
In a statement, the BSP attributed the continued drop in TDF rates to strong demand as well as the impact of the unexpected 50 basis points reduction in the central bank’s key policy rates during the rate-setting meeting of the policy-making Monetary Board last June 26.
“Today’s auction results also reflect the market preference for longer-tenor TDF amid ample liquidity in the financial system. The BSP will continue to assess current market developments and liquidity conditions in deciding on the volume of its TDF operations,” it added. (PNA)
