BW FILE PHOTOYIELDS on the Bangko Sentral ng Pilipinas’ (BSP) short-term securities continued to drop on Friday, even with the one-month tenor going undersubscribed.
Tenders for the central bank securities reached P186.394 billion on Friday, below the P200-billion offer and the P256.109 billion in bids for the P180 billion auctioned off in the previous week.
Broken down, the 28-day BSP bills fetched bids amounting to P74.195 billion, lower than the P100-billion offer and the P117.382 billion in tenders for the same volume placed on the auction block a week prior. The central bank accepted all the submitted tenders.
Banks asked for yields ranging from 5.64% to 5.9%, wider than the 5.81% to 5.904% band seen a week earlier. This caused the average rate of the one-month securities to drop by 5.21 basis points (bps) to 5.8138% from 5.8659% previously.
Meanwhile, bids for the 56-day bills amounted to P112.199, higher than the P100-billion offering but below the P138.727 billion in tenders for a P80-billion offer the previous week.
Accepted rates for the two-month tenor were from 5.65% to 5.875%, wider and lower than the 5.82% to 5.909% margin seen a week prior. With this, the average rate of the 56-day securities fell by 10.56 bps to 5.7867% from 5.8923% logged in the prior auction.
The central bank increased the total volume of BSP bills (BSPB) that it offered on Friday, but demand eased compared to the week prior, BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.
“Total tenders received decreased to P186.394 billion (from P256.109 billion) and resulted in bid-to-cover ratios of 0.74 times for the 28-day BSPB and 1.12 times for the 56-day BSPB.”
“The BSP awarded the P74.195 billion worth of total tenders for the 28-day BSPB and fully awarded its offering for the 56-day BSPB,” he added.
The central bank uses both the BSP securities and its term deposit facility to mop up excess liquidity in the financial system and to better guide market rates.
The BSP bills were calibrated to not overlap with the Treasury bill and term deposit tenors also being offered weekly.
Data from the central bank showed that around 50% of its market operations are done through the short-term BSP securities.
These short-term instruments offer more stability and predictability, the BSP earlier said. These are also considered “high-quality liquid assets” and gives banks more flexibility versus the term deposits, which are not tradable. — Luisa Maria Jacinta C. Jocson
