The Bangko Sentral ng Pilipinas (BSP) auction of 28-day BSP bills on Friday fetched a higher yield at 1.8000 percent while still oversubscribed by 1.3 times.
“The rise in the BSP bills’ rate can be attributed to market participants’ continued search for yield amid the ongoing issuance of Retail Treasury Bonds as well as market reaction to the newly released February inflation data,” said BSP Deputy Governor Francisco G. Dakila Jr.
The BSP offered and awarded in full P80 billion, this was lower than P90 billion last March 1. It received P106.67 billion in tenders, also lower compared to P102.12 billion of the previous auction. Bids have been decreasing for the last three auctions.
Dakila said that “in line with current market trend” the 28-day BSP bills’ weighted average rate went up to 1.8000 percent, up by 6.964 basis points (bps) from 1.7303 percent.
He also noted that the range of accepted yields were higher and narrower at 1.725-1.950 percent last Friday.
“Financial system liquidity remains ample as reflected in the auction’s oversubscription,” said Dakila.
The BSP securities facility’s bid coverage ratio last Friday stood at 1.3334 percent.
BSP securities were first offered last September 2020. The BSP bills are issued as monetary instruments to influence the volume of liquidity in the financial system by absorbing structural excesses.