MANILA – The rates of the Bangko Sentral ng Pilipinas (BSP) term deposit facility (TDF) increased Wednesday despite under subscriptions for the seven- and 14-day facilities.
The average rate of the shortest-tenor TDF increased to 1.7810 percent, the 14-day to 1.8658 percent, and the 28-day to 1.7770 percent.
These were at 1.7542 percent, 1.7566 percent, and 1.7655 percent for the seven-day, 14-day, and 28-day facility during the auction last August 5.
The BSP offered the seven-day facility for PHP140 billion, the same as last week, and received tenders amounting to PHP98.58 billion. The auction committee accepted all the bids.
This resulted in the drop in the bid coverage ratio to 0.7041 from last week’s 1.4016.
Bids for the 14-day facility reached PHP104.13 billion, lower than the PHP130-billion offer. The auction committee accepted all the tenders.
The bid coverage ratio slipped to 0.8010 from 1.3743 last week.
Last week, this tenor was offered for PHP180 billion and tenders amounted to PHP247.365 billion.
BSP offered the longest-tenor facility for PHP50 billion this week, lower than last week’s PHP60-billion offer.
Tenders totaled to PHP62.23 billion and the auction committee made a full award.
The bid coverage ratio went down to 1.2446 from last week’s 1.3816 when tenders amounted to PHP82.895 billion.
In a statement, BSP Deputy Governor Francisco Dakila Jr. traced the lower bids for the seven- and 14-day TDF partly to “temporary impact of the scheduled settlement of the retail treasury bonds as well as the market participants' reaction to recent developments such as the release of the lower-than-expected Q2 (second quarter) 2020 GDP (gross domestic product) data.”
However, he said “financial system liquidity remains ample as (the) majority of bids remained close to the ODF (overnight deposit facility) rates.”
“Looking ahead, the BSP’s monetary operations will remain guided by its assessment of market developments and liquidity conditions,” he added.
The settlement date for the government-issued five-year retail treasury bond (RTB) is August 12.
The government reported that domestic output in the second quarter this year is at -16.5 percent, a deeper contraction than the -0.7 percent in the first three months of the year, which authorities traced to the impact of the enhanced community quarantine implemented to address the rise of the coronavirus disease 2019 cases. (PNA)
