MANILA - The rate of the Bangko Sentral ng Pilipinas' (BSP) 28-day bill slipped anew on Friday but the securities attracted lower bids.
BSP data show that the average rate of the debt paper went down to 6.6370 percent from 6.6521 percent during the auction last June 16.
It kept the offer volume at PHP120 billion but bids only amounted to PHP119.61 billion. The auction committee accepted PHP117.61 billion.
In a statement, BSP Deputy Governor Francisco Dakila Jr. said the range of yield accepted in this week's securities auction widened to between 6.5800-6.7000 percent.
"The results of today’s auction came following the BSP’s decision to keep monetary policy settings unchanged. Overall liquidity remains ample even as market participants tended to client requirements," he said.
He added that the central bank "looks toward its inaugural offering of 56-day BSP bills next week, 30 June 2023."
"As always, the BSP’s monetary operations will continue to be guided by its assessment of prevailing liquidity conditions and market developments," the BSP official said.
The offering of the longer tenor BSP debt paper is aimed at providing additional options for the market to park their funds and help in the central bank's monetary operations enhancement bid.
Earlier, the BSP said offering the new tenor "expands the range of BSP’s term instruments and increases the BSP’s flexibility to respond to changing liquidity conditions, while providing additional guidance to short-term market interest rates."
"Its introduction supports the BSP's efforts towards a more flexible and market-based approach to managing liquidity in the financial system, in line with its overall thrust to promote price and financial stability," it added. (PNA)