Yield for BSP bills declines

Published December 4, 2020, 5:06 PM

by Lee C. Chipongian

The average rate of the Bangko Sentral ng Pilipinas’ (BSP) 28-day securities fell on Friday while bids remained oversubscribed.

The auction of BSP bills attracted P117.10 billion tenders against an offer of P60 billion. The tenders were higher than the previous week’s P112.20 billion. The offer size was unchanged.

The yield fell to 1.6985 percent from 1.7053 percent. The range of accepted yields was at 1.690 percent to 1.710 percent compared to last week’s 1.700 percent to 1.725 percent. The bid coverage ratio was at 1.9517.

BSP Governor Benjamin E. Diokno said last week that there are plans for more market-based monetary operations. He also said the BSP securities facility will gradually increase supply of risk- free financial instruments in the banking system which will further develop the domestic bond market.

As of November 23, the BSP has absorbed P1.9 trillion of liquidity via the weekly term deposit facility, the overnight deposit facility, reverse repurchase or RRP facility and securities facility.

The BSP’s authority to issue its own debt securities was revived in 2019.