TDF rates down, ample liquidity in system cited

By Joann Villanueva/Philippine News Agency

MANILA — The rates of Bangko Sentral ng Pilipinas’ (BSP) term facilities declined anew Wednesday.

The average rate of the seven-day Term Deposit Facility (TDF) went down to 4.7567 percent from 4.7764 percent during the auction last April 17.

BSP offered it for PHP10 billion and banks submitted a total of PHP15.024 billion worth of bids. The auction committee made a full award.

Tenders for this tenor was lower this week compared to the PHP30.15 billion last week, since two tenors were offered this time around.

With the drop in bids, the tenor’s bid coverage ratio slid to 1.5024 from 3.0150 in the previous week.

The average rate of the 14-day facility slipped to 4.7789 percent from 4.9148 percent during the auction last April 10.

Banks submitted a total of PHP19.303 billion worth of bids, lower than the PHP20.625 billion during the auction two week ago as well as the PHP10-billion offer, which was fully awarded.

Bid coverage ratio went down to 1.9303 from 2.0625 last April 10.

BSP Deputy Governor Diwa Guinigundo, in a reply to a message from the Philippine News Agency (PNA), cited the higher bids that banks are submitting during the TDF auctions.

“Only one thing is clear: liquidity situation is normalizing after the Holy Week and the tax season and therefore, the so called tight liquidity situation was indeed temporary,” he said.

Bids during TDF auctions before a holiday are normally low and monetary officials attribute this to banks’ holding on to their cash to be able to cater to the higher requirements of their clients and the public during holidays.

For the latest updates about this story, visit the Philippine News Agency website

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