MANILA — The Bangko Sentral ng Pilipinas (BSP) has awarded the seven-day term deposit facility (TDF) in full as bids for the short tenor facility poured in on Wednesday’s auction.
Tenders for the PHP40-billion seven-day TDF reached PHP58.28 billion. Average rate of this facility declined to 3.6979 percent from last week’s yield of 3.7006 percent.
Bids for the 14- and 28-day TDFs were undersubscribed.
The BSP awarded PHP39.095 billion of the total PHP40-billion 14-day TDF at 3.7222 percent rate.
Bids for 28-day TDF reached PHP15.78 billion, making the central bank award the same amount for the said tenor. Yield for this tenor settled at 3.7264 percent. The 28-day TDF was offered at PHP20 billion.
Meanwhile, the BSP maintains the volume for next week’s TDF auction at PHP100 billion.
The TDF is a key liquidity absorption facility, commonly used by central banks for liquidity management.
Due to the BSP’s inability to issue its own debt instruments, the TDF will be tasked to withdraw a large part of the structural liquidity from the financial system to bring market rates closer to the BSP policy rate, the central bank explained. (Kris Crismundo/PNA)