2-tenor TDF attracts P34.33-billion bids

By Lee C. Chipongian

The central bank’s term deposit facility (TDF) – with two tenors this week – had tenders amounting to P34.33 billion versus offer of P20 billion.

Bangko Sentral ng Pilipinas (BSP) logo

Based on Bangko Sentral ng Pilipinas (BSP) data, the 8-day TDF, offered at P10 billion, attracted bids worth P15.02 billion, lower than the previous auction’s P30.15 billion.

Last April 17, the 7-day tenor is the only term deposit offered by the BSP. The 7-day TDF’s averaged rate fell to 4.7567 percent on Wednesday compared to 4.7764 percent.

The 14-day TDF had P19.30 billion bids against offer of P10 billion. Its yield was at 4.7789 percent.

The 28-day tenor is still not on TDF board. The last time the longer-dated TDF was in the auction was March 20, with P10 billion. At that time, the TDF total volume was P50 billion.

BSP Deputy Governor Diwa C. Guinigundo said they continue to see low demand for the 28-day. He reiterated however that the liquidity tightness in the market – on account of the Natonal Government’s own mopping up operations – is only temporary, especially after the Lent season and during the tax payment period.

But, Guinigundo said liquidity will soon return to the financial system as government spends more, thus infusing money in the market and releasing funds to re-deposit in banks. He has said that there is lower excess liquidity at the moment because banks have started to lend more and in a big way to finance economic activities, as well as investing more in government securities. Also, with continued uncertainty in the global economy, banks are buying plenty foreign exchange for hedging.