BSP keeps TDF volumes despite undersubscription

A logo of Bangko Sentral ng Pilipinas (Central Bank of the Philippines) is seen at their main building in Manila

BANKS’ interest on the Bangko Sentral ng Pilipinas’s (BSP) longer-term deposit auction facilities started to wane anew on Wednesday, but the central bank still decided to keep its auction volumes for next week.

The monetary board decided to still offer a total of P100 billion in term deposits for next week — P40 billion under its seven-day term deposit facility, another P40 billion for its 14-day TDF and P20 billion for its 28-day TDF.

This volume setting has been in place since the start of June this year.

BSP officials earlier said that aside from monetary policy-rate changes, the monetary board could also steer their monetary policy direction by allowing the market determined TDF rates to rise or fall.

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The BSP does this by altering auction volumes.

Rates during the week showed mixed movements, with the short-term facility fetching a lower rate while the medium- and long-term facility hit higher rates.

In the 7-day facility, in particular, bids on Wednesday hit P58.282 billion covering more than the P40 billion offered by the BSP for the week. This yielded a 3.6979-percent rate during the week, lower than last week’s 3.7006 percent.

For the 14-day facility, tenders fell scarce of the P40 billion offered for the week at P39.095 billion. This fetched a 3.7222-percent rate, up from the previous week’s 3.6916 percent.

The same is true for the 28-day facility, where bids hit P15.78 billion covering only 79 percent of the P20 billion offered for the week. The rate in this facility was also up to 3.7264 percent, from the 3.7179 percent in the previous week.

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Bianca Cuaresma graduated cum laude from the University of Santo Tomas (UST) with a degree in AB Journalism. She was with the BusinessMirror during her internship in 2012 where she was assigned at the Department of Foreign Affairs (DFA) beat. She continued to be of service to the paper after she graduated in 2013. In 2014, she was awarded as the Reporter of the Year by the paper for her coverage in the Bangko Sentral ng Pilipinas (BSP). She is a BusinessMirror reporter for 3 years now, and has covered general assignments and agencies related to banking and finance in the country.