MANILA – The rate of the Bangko Sentral ng Pilipinas’ (BSP) 28-day securities rose Friday as investors continued to look for yields given the elevated inflation rate.
Data released by the central bank showed that the average rate of the debt paper increased to 1.9444 percent from 1.8000 percent during the auction last March 5.
The BSP offered the securities for PHP80 billion, the same as last week.
However, tenders reached PHP77.45 billion, resulting in a bid coverage ratio of 0.9681.
In a statement, BSP Deputy Governor Francisco Dakila Jr. said the auction committee accepted all the bids amid the increase in the weighted average interest rate.
Dakila attributed the recent upticks in the BSP bills to “market participants’ search for yields amid rising inflation expectations.”
He said the rise in the securities’ interest rate, however, remains in line with market expectations.
“Moreover, the auction results reflect the impact of the settlement of the retail treasury bonds earlier this week as well as market’s anticipation of the Easter holidays,” he said.
Even with the undersubscription in this week’s BSP bills auction, Dakila said “financial system liquidity remains ample.”
“Up ahead, the BSP’s monetary operations will continue to be guided by its assessment of the latest liquidity condition and market developments,” he added. (PNA)
