THE Bangko Sentral ng Pilipinas (BSP) partially awarded Term Deposit Facilities (TDFs) as investors preferred shorter tenors during the auction on Wednesday.
The BSP offered a total of P280 billion in today’s TDF auction from P310 billion last week. Of this amount, P150 billion was allocated to the 7-day tenor, lower than the P170 billion last week, and P130 billion for the 14-day tenor, which was lower than the P140 billion in the previous week.
However, only P256.77 billion was awarded by the Central Bank during the auction. This was composed of P150 billion for the 7-day tenor and P106.77 billion for the 14-day tenor.
“The results of the TDF auction show market participants’ preference for the shorter tenor ahead of All Souls’ Day holiday as well as to fund loan releases and deposit maturities,” BSP said.
“Nonetheless, financial system liquidity remains adequate. For its part, the BSP’s monetary operations will remain guided by its assessment of the latest liquidity conditions and market developments,” it added.
Total tenders amounted to P276.096 billion which was within the range of expected volume of the BSP. This is composed of P169.326 billion for the 7-day TDFs and P106.77 billion for the 14-day TDFs.
The BSP said the 7-day TDF was oversubscribed, receiving bids 1.13x the volume offered while the 14-day TDF was undersubscribed, with bids reaching 0.82x the offering.
The weighted average interest rate (WAIR) for the two tenors continued to rise from the rates last week. The 7-day WAIR increased by 9.7381 bps to 4.7093 percent as the 14-day WAIR rose by 11.1871 bps to 4.7611 percent.
The yields accepted in the 7-day tenor shifted higher but narrowed to a range of 4.5800-4.8398 percent. Meanwhile, that for the 14-day tenor shifted higher and widened to a range of 4.4800-5.2125 percent.
