MANILA – Auction of the initial 28-day Bangko Sentral ng Pilipinas (BSP) Bill was met with strong demand Friday.
Data released by the central bank showed that the debt paper was offered for PHP20 billion and tenders reached PHP43.36 billion. The auction committee made a full award.
Rate of the debt securities stood at 1.8355 percent while bid coverage ratio is at 2.1680.
Auction of the central bank’s own debt paper was restored under the New Central Bank Act and is in line with the BSP’s bid towards more market-based monetary operations.
BSP said volume offering for the BSP Bills as well as the BSP bonds that will be auctioned later on will be gradually increased depending on demand and the central bank’s assessment on the supply of domestic liquidity in the economy.
The debt securities is part of the BSP’s liquidity management tools and reinforces monetary policy implementation under the Interest Rate Corridor (IRC), which the central bank adopted in June 2016.
It is also among the risk-free financial instruments in the domestic banking system and is seen to boost the local bond market. (PNA)
