TDF rates down; bids oversubscribed

Published February 26, 2020, 12:00 AM

by manilabulletin_admin

By Lee C. Chipongian

Bids continue to surpass the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) while yields were down, again.

The BSP has not changed its ₱130 billion TDF volume for the past two weeks and on Wednesday, tenders reached ₱173.66 billion. The 7-day TDF which was offered at ₱40 billion, attracted ₱50.26 billion.

This was a lower amount compared to ₱66.42 billion last February 19. The average rate fell to 3.8250 percent from 3.8301 percent.

The 14-day tenor, offered at ₱50 billion still, had bids amounting to ₱69.91 billion versus ₱57.72 billion. Yields dropped to 3.8654 percent from 3.8759 percent.

The longest-dated tenor, the 28-day with an offer size of ₱40 billion, received ₱53.49 billion in tenders on Wednesday. This was lower than the previous week’s P59.33 billion. The average rate slipped to 3.8918 percent from 3.8984 percent.

The BSP is preparing to announce its market campaign for the offer of its own bonds or securities.

The BSP bonds will complement the offer of the weekly TDF, with the latter handling larger liquidity. The BSP’s mechanism for the bond offer will be done with the Bureau of the Treasury including tie up with the National Registry of Scripless Securities.

The BSP will be using BTr-RoSS as platform for the auction and registry of its bonds when these are issued in the second quarter this year.

The BSP and the BTr has had several meetings since 2018 to discuss which of the curve the BSP will be issuing its bonds so as not to interfere with BTr sale of debt securities.

The central bank restored its authority to sell its own bonds last February 14, 2019 when the amendments to the BSP Charter was signed into a new law after 25 years since the BSP pushed for its charter change.