The central bank’s auction of its 28-day BSP bills fetched a higher rate and bigger volume this week, based on results from the Bangko Sentral ng Pilipinas (BSP).
The 28-day securities was offered higher at P60 billion on Friday versus P50 billion last week. It remained oversubscribed with P109.20 billion. Tenders this week were higher than October 2’s P87.51
The weighted average accepted yield also rose to 1.8487 percent compared to the previous week’s 1.8423 percent. The range of accepted yield was 1.8400 percent to 1.8600 percent.
The bid coverage ratio was at 1.8200 which would indicate more demand compared to last week’s 1.7502.
BSP Deputy Governor Francisco G. Dakila Jr. said the “sustained strong market interest for BSP bills continues to reflect ample liquidity in the financial system.” He also said that market participants “are seen to have sufficiently integrated the BSP Securities Facility with their liquidity management. Moving forward, the BSP will continue to refine and recalibrate the overall strategy of its current monetary operations, guided by its assessment of recent market developments and liquidity conditions.”
The BSP’s P60-billion offer for the 28-day bills was awarded in full. “The weighted average interest rate settled at 1.8487 percent, 0.642-bp higher than the previous week’s rate. Accepted yields were narrower (while) total tenders (were) 1.8 times higher than the offered amount,” noted Dakila.
The 28-day BSP bill has a similarly-dated tenor in the term deposit facility (TDF).
During Wednesday’s auction, the BSP offered the 28-day TDF also at P60 billion and it received P107.71 billion tenders. Its average rate is close to the BSP Bill rate at 1.8445 percent.
The BSP issued its first BSP Bill on September 18.
The BSP securities are auctioned off every Friday and for the moment, only the 28-day tenor is offered because banks have a preference for short term maturities.