The Bangko Sentral ng Pilipinas (BSP) partially granted term deposit facilities (TDFs) as investors preferred shorter tenures during Wednesday’s auction.
BSP reduced the bid size for the TDF auction to 350 billion pesos from 390 billion pesos last week. The total supply volume was also reallocated between the 7-day and 14-day periods at 190 billion pesos from 220 billion and 160 billion from 170 billion respectively.
However, the 7-day TDF was only oversubscribed, with the relevant bid-to-coverage ratios (BCR) for the 7-day and 14-day TDF at 1.365x and 0.905x. However, BSP said the total bids received amounted to 404.159 billion pesos, well within the expected range of the Billing Settlement (BSP) payment volume.
“The results of the TDF auction came when eligible counterparties reallocated their positions towards the shorter term as part of their efforts to manage liquidity in anticipation of certain client requirements,” BSP Deputy Governor Francisco J. D’Aquila Jr. was quoted as saying in a statement. .
He added, “Going forward, the BSP’s cash operations will continue to be guided by its assessment of the latest liquidity conditions and market developments.”
Of the total bids received, about 334.785 billion pesos were accepted, BSP said. BSP awarded 190 billion pesos out of 259.374 billion in bids in a period of 7 days and accepted 144.785 billion pesos in a period of 14 days.
The data showed that the weighted average of interest rates (WAIR) for bids awarded in both periods decreased from the previous week.
The 7-day TDF’s WAIR index fell 5.7976 basis points to 6.2973 percent, while the 14-day TDF’s index fell 2.4717 basis points to 6.3733 percent.
The 7-day accepted returns turned lower and expanded to 6-6.4 percent, while the 14-day accepted returns expanded to 6.15-6.5088 percent.