The central bank’s auction of its single tenor 28-day Bangko Sentral ng Pilipinas (BSP) securities fetched a higher weighted average rate of 1.7303 percent last Friday, and fully awarding the P90 billion offer.
BSP Deputy Governor Francisco G. Dakila Jr. noted that the yield was up by 6.201 basis points from the previous week’s 1.6683 percent, while the accepted yields of 1.665-1.995 percent were “higher and wider” than the auction on February 19.
“There was oversubscription with bids received reaching a total of P102.12 billion or about 1.13x the offered volume,” said Dakila. Tenders received in the previous auction was higher at P154.90 billion.
Dakila said the auction results “continue to broadly reflect market participants’ search for yield amid the ongoing offering of Retail Treasury Bonds (RTBs) of the Bureau of the Treasury. Nevertheless, liquidity in the financial system as a whole remains ample.”
The bid coverage ratio for the one-month BSP bills stood at 1.1347, lower than the previous 1.7211.
BSP securities were first offered last September 2020. These debt securities issuance are monetary instruments to influence the volume of liquidity in the financial system by absorbing structural excesses.
As part of pandemic response, the BSP injected close to P2 trillion of extra liquidity into the financial system last year. Bulk of these funds were re-absorbed by the BSP via its term deposit facility, securities facility, overnight reverse repurchase facility, overnight deposit facility, and overnight lending facility.