BSP bills offered lower yields


The central bank has fully awarded the P60-billion volume it offered for this week’s auction of 28-day Bangko Sentral ng Pilipinas (BSP) bills and it had a lower yield and bid ratio.

The BSP’s securities offering is lower than P70 billion last week. Tenders amounted to P121.72 billion, higher than October 30’s P120.55 billion. The rate dropped to 1.9922 percent.

 “The BSP fully awarded the P60-billion offering in the 29-day bills auction,” said BSP Deputy Governor Francisco G. Dakila Jr. “The weighted average interest rate declined by 4.451 bps (basis points) from the previous week’s rate to 1.9922 percent.”

 “Amid sustained strong demand and lower offer volume, majority of the bids received shifted to the low end of the accepted yields following the results of last week’s auction wherein most of the bids were cut off,” noted Dakila.

 The range of yields accepted continued to be narrow at 1.980-2.000 percent.

 The bid coverage ratio, in the meantime, is lower is higher this week at 2.0288 versus 1.7221 previously.

 “The results of the BSP bill auction show that financial system liquidity remains ample. The BSP will continue to be guided by its assessment of market developments and liquidity conditions in the conduct of its monetary operations going forward,” said Dakila.

 Total tenders of P121.73 billion is 2.0 times the offer volume.

 The BSP started offering securities on September 18, as of one of its main liquidity management tools. Prior to September, the last time the BSP issued its own securities was July, 1993.

 The BSP securities facility withdraws structural liquidity from the financial system by locking funds in longer-term monetary instruments and it is also tradeable in the secondary market. For now, the central bank is only offering one-month tenor bills and no bonds which will have longer-dated maturities.