LOW DEMAND. Bangko Sentral ng Pilipinas' (BSP) term deposit facility (TDF) registered undersubscription during the auction on Wednesday (Nov. 8, 2023), which BSP Deputy Governor Francisco Dakila Jr. traced to banks' decision to adjust asset position and to cater to clients requirements. Average rate of both the seven- and 14-day TDF rose relative to last week's level. (PNA file photo)
MANILA – The Bangko Sentral ng Pilipinas (BSP) hiked on Wednesday the offering for the term deposit facility (TDF) but this was met with low demand and higher rates.
The BSP increased the offer volume for the one-week facility to PHP230 billion from PHP190 billion during the auction last Nov. 3.
However, bids only amounted to PHP199.395 billion, which the auction committee fully awarded.
The two-week TDF was offered for PHP170 billion from last week’s PHP120 billion. However, total tenders amounted to PHP124.93 billion and the auction committee accepted PHP123.93 billion.
Total tenders in this week’s TDF auction are below the central bank’s expected volume range which, according to BSP Deputy Governor Francisco Dakila Jr., transpired because “market participants adjusted their asset positions and tended to client requirements.”
The rates of both tenors rose this week to 6.6141 percent for the seven-day facility, and to 6.6233 percent for the longer tenor.
The average rate of the five-day TDF in last week’s auction, shortened given the All Saints’ Day and All Souls’ Day holidays last Nov. 1 and 2, respectively, stood at 6.5740 percent and the 12-day tenor was at 6.5902 percent.
“Looking ahead, the BSP’s monetary operations will continue to be guided by its assessment of prevailing liquidity conditions and market developments,” Dakila added. (PNA)
