The various banks hesitated to part with much of their money on Wednesday and brought far less of the resources to the term deposit windows of the Bangko Sentral ng Pilipinas (BSP) that on auction day usually reports buoyant subscriptions.
The results of Wednesday’s auction showed the twin term deposit facilities (TDFs) attracting fewer than usual subscription as bids proved lower than that offered by the BSP.
“[The] suspension of work appears to be the reason for the banks to keep funds with them. Of course, they continue to lend out, invest, etc.,” BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said of the Malacanang announcement declaring today, Thursday, as a day of protest and the impact this had on the banking system.
At the auction, both the seven- and 28-day TDFs were undersubscribed, with the short tenor bids attracting only P36.89 billion, covering 92.23 percent of the total amount offered for the week of P40 billion.
As for the 28-day TDF, this attracted only P67.155 billion, covering 61.05 percent of the P110 billion offered for the week.
The twin facilities attracted fewer bids compared to last week’s sale exercise.
Both also attracted higher rates, with the seven-day TDF hitting 3.3765 percent from only 3.3484 percent, last week, and the 28-day TDF rate reaching 3.496 percent from 3.495 percent.
President Duterte earlier declared Thursday as a “national day of protest”, suspending work at select government offices, as well as classes in some schools.
The BSP, however, did not declare a suspension, its officers and staff still conducting regular operations. The policy-making Monetary Board will convene on Thursday as scheduled no matter the Malacañang declaration.
The Bankers Association of the Philippines (BAP) also said member-banks will continue to observe regular work hours today, Thursday.
“The Bankers Association of the Philippines would like to inform the public that all member-banks will remain fully operational despite the suspension of work in government offices on September 21, 2017,” the BAP said in a statement.
“Normal check-clearing operations, trading and other financial transactions will be observed to fully serve the banking public,” it added.