TDFs undersubscribed as rates rise across-the-board

By Joann Villanueva/Philippine News Agency

MANILA — The rates of Bangko Sentral ng Pilipinas’ (BSP) term deposit facilities rose across-the-board Thursday, although all tenors ended up undersubscribed.

Data released by the central bank showed that banks submitted a total of PHP31.614-billion worth of bids, lower than the total of PHP40-billion offer.

The rate of the seven-day facility increased to 4.6669 percent from 4.6187 percent during the auction last May 29.

BSP offered it for PHP20 billion but tenders only amounted to PHP18.895 billion.

The bid coverage ratio jumped to 0.9448 from the previous auction’s 0.7490 since tenders last week are lower at PHP14.98 billion.

The rate of the 13-day facility, a day short because of the holiday on Wednesday, improved to 4.6048 percent from the previous week’s 4.5910 percent.

Its bid coverage ratio went up to 0.6665 from 0.6110 last week after tenders this week reached PHP6.665 billion, lower than the PHP10 billion offer but higher than the previous session’s PHP6.110 billion.

The average rate of the 27-day TDF, also a day short than the usual tenor, ticked up to 4.6602 percent from 4.5974 percent last week.

It was offered for PHP10 billion but banks submitted PHP6.054 billion worth of bids, which is also lower than last week’s PHP8.065 billion tenders.

This resulted in the decline of the bid coverage ratio to 0.6054 from past week’s 0.8065.

Monetary authorities said that it is understandable for banks to submit lower bids during weeks that are cut short by holidays since they get to hold on to their funds, catering to their clients’ liquidity needs during the holiday.

Malacañang declared June 5, 2019 a holiday around the country as Muslims celebrate Eid’l Fitr, or the end of the month-long Ramadan.

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

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