By Lee C. Chipongian
The yields on the central bank’s term deposit facility (TDF) dropped this week while bids were mixed.
Based on Bangko Sentral ng Pilipinas (BSP) data, all three tenors registered lower weighted average accepted rates while total bids amounted to P59.78 billion which was more than offer of P50 billion.
The 7-days, offered at P20 billion, received tenders of P29.74 billion which was lower than last week’s P35.34 billion. The yields declined to 5.0630 percent from 5.0706 percent.
The 14-day TDF, also offered at P20 billion, had bids of P17.32 billion which was lower compared January 9’s P23.29 billion. Rates fell to 5.1290 percent from 5.1530 percent.
The 28-days attracted tenders of P12.72 billion which was more than offer of P10 billion. It was lower than the previous Wednesday’s P14.87 billion. The average rate was at 5.1339 percent from 5.1694 percent.
BSP Deputy Governor Diwa C. Guinigundo has said that they see banks’ excess funds returning to the BSP for some weeks.
The auction-based TDF, a BSP open market operation, is part of the interest rate corridor (IRC) system adopted by the BSP in June 2016. The IRC helps the BSP guide short-term market rates closer to the overnight reverse repurchase borrowing rate.
Last year, the Monetary Board has raised key rates by 175 basis points cumulative as an anti-inflation measure. The TDF yields followed the rate increase with a benchmark rate currently at 4.75 percent, the overnight lending at 5.25 percent and the deposit rate at 4.25 percent.