RATE INCREASE. Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco Dakila Jr. traced Friday’s (Aug. 5, 2022) rise in the average rate of the central bank's 28-day securities to the impact of the latest increase in the BSP's key rates. He said investors may also look forward to the scheduled Retail Treasury Bond auction later this month, thus the demand for higher yield. (Photo from BSP)

MANILA – The rate of the Bangko Sentral ng Pilipinas’ (BSP) 28-day securities rose on Friday, which was traced to the impact of the latest hike in the central bank’s key policy rates.

Data released by the BSP showed that the average rate of the debt paper inched up to 3.6439 percent from 3.5129 percent during the auction on July 29.

The BSP hiked the offer volume to PHP170 billion from PHP150 billion and the auction committee made a full award. Total bids reached PHP172.41 billion.

“The results of the BSP bill auction continue to reflect the pass-through of the recent policy rate increase on short-term rates,” BSP Deputy Governor Francisco Dakila Jr. said in a statement.

He was referring to the off-cycle 75 basis points increase in the BSP’s key rates in July, which was made to help address the impact of the higher US inflation rate on the local currency and the interest rate differential between the US and the Philippines.

“Moreover, market participants may also be looking forward to the expected Retail Treasury Bond issuance later this month. In view of this, the BSP’s monetary operations will remain guided by its assessment of the latest liquidity conditions and market developments,” he added. (PNA)