BSP bills slightly undersubscribed

Published February 15, 2021, 5:21 PM

by Lee C. Chipongian

The auction of Bangko Sentral ng Pilipinas (BSP) 28-day securities was slightly undersubscribed at P99.05 billion versus offer of P100 billion while yields increased.

 “The very slight undersubscription in the 28-day bills auction reflects market participants preference for shorter tenors in view of the Bureau of the Treasury’s scheduled settlement for the Retail Treasury Bills (RTB) on March 9, 2021,” said BSP Deputy Governor Francisco G. Dakila Jr. “Nevertheless, liquidity in the financial system remains ample. Going forward, the BSP’s monetary operations will continue to be guided by its assessment of liquidity conditions and market developments,” he added.

 Dakila noted that the BSP fully awarded the bids received – “resulting in an increase in the weighted average interest rate by 2.784 bps (basis points) to 1.6402 percent.” He also said the yields accepted remained low “but more dispersed, ranging from 1.603-2.000 percent.”

 The tenders amounting to P99.05 billion is 0.99x the offered amount. The bid coverage ratio stood at 0.9905.

 The BSP is currently reviewing the list of eligible market participants to its securities facility. Since September 18 last year when the securities facility was first introduced, the BSP is only offering 28-day bills.