TDF bids top P622.44 B

Published November 11, 2020, 5:06 PM

by Lee C. Chipongian

The central bank’s term deposit facility (TDF) auction received P622.44 billion in tenders this week versus offer of P480 billion.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila Jr. noted the continued strong demand for the TDF which is only offered at 7-day and 14-day tenors, and he also commented on the “observed preference for the longer tenor.”

“There was oversubscription as the 7-day and 14-day tenors received 1.25x and 1.32x their respective offer volumes,” said Dakila.

The 7-day allocation for this week was lower at P180 billion compared to P220 billion last November 4. Bids amounted to P225.19 billion which was higher than P189 billion last week. The average rate increased to 1.9720 percent from 1.9540 percent previously.

The 14-day tenor is the opposite, it was offered higher this week at P300 billion versus P270 billion last Wednesday.  It was oversubscribed at P397.24 billion. However the tenders were lower than the previous week’s P404.95 billion. The yield fell to 2.0138 percent from 2.0454 percent.

The 28-day TDF was still not being offered in favor of the one-month BSP securities auctioned off every Friday since September 18.

The average interest rate for the 7-day TDF increased by 1.797 basis points (bps) while the 14-day TDF decreased by 3.155 bps. “The range of accepted yields were narrower compared to last week with the 7-day TDF accepting 1.900-2.027 percent and the 14-day TDF accepting 1.875-2.084 percent,” said Dakila.