The Bangko Sentral ng Pilipinas (BSP) offered P390 billion term deposit facility (TDF) this week because of banks’ bigger demand and while yields were mixed, tenders breached the offer with P575.31 billion.

“The TDF auction results continue to reflect ample liquidity conditions in the financial system. The BSP’s monetary operations will remain guided by its assessment of market developments and liquidity conditions moving forward,” said BSP Deputy Governor Francisco G. Dakila Jr.

The shortest-dated tenor, the 7-day, received P262.56 billion tenders versus offer of P170 billion which was higher than the previous auction’s P160 billion offer. The average yield for the 7-day TDF fell to 1.8346 percent from 1.8377 percent.

The 14-day TDF also had a higher offer this week of P190 billion from P170 billion last September 16. It was also oversubscribed with bids amounting to P253.87 billion. Its average rate was at 1.8520 percent, up from last week’s 1.8460 percent.

The 28-day TDF, despite its similar-dated BSP Bills which was issued for the first time last week, was offered with a higher volume of P30 billion compared to P20 billion previously. Tenders exceeded the offer at P58.88 billion. Yields even increased to 1.8416 percent from 1.8409 percent.

The BSP’s offer size of P390 billion is bigger than last week’s P350 billion.

“All tenors were oversubscribed receiving tenders at 1.54x, 1.34x and 1.96x the offer volumes in the 7-day, 14-day and 28-day tenors, respectively. Total tenders submitted amounted to P575.31 billion, consistent with the BSP’s expected volume range,” noted Dakila.

In the meantime, he said the range of yields accepted were narrower this week for all three tenors. This were: 1.800-1.870 percent in the 7-day TDF; 1.802-1.870 percent in the 14-day TDF; and 1.818-1.852 percent in the 28-day TDF.

As of end-June this year, the BSP has absorbed P1.5 trillion of liquidity from the financial system, mostly going to its overnight deposit facility which siphoned off 73.3 percent of total.

Both the TDF and Reverse Repurchase or RRP Facility absorbed 13.4 percent each of the total P1.5 trillion. In March until part of June, some of the TDF offerings were suspended to divert some funds as loans or investments in government securities.

Stocks close flat again

The local stock market was flat again yesterday as investors lack reason to aggressively buy or sell stocks amid so much uncertainty.

The Philippine Stock Exchange index (PSEi) shed 1.56 points ,or 0.03 percent, to end at 5,892.72 with only the Industrial and Holding Firms counters in the green.

Volume remained weak at 1.47 billion shares worth P4.45 billion with gainers barely edging out losers at 92 to 90 with 56 unchanged.

“Local shares closed flat as investors appeared to overcome worries about renewed coronavirus lockdowns in Europe and rising political uncertainty in the U.S.,” said Regina Capital Development Corporation Managing Director Luis Limlingan.

AAA Equities Head of Research Chris Mangun said “The general sentiment remains cautious despite the daily improvement in economic activity. There is some concern that without additional mobility, with the easing of restrictions on public transportation as well as reopening of tourism focused industries, economic activity may be at its peak.”