TDF yields continue to decline


The central bank’s term deposit facility (TDF) were oversubscribed on Wednesday but yields continue to fall in normalizing conditions, according to Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila Jr.

“The TDF auction results continue to show normal market conditions amid ample liquidity in the financial system,” said Dakila. He reiterated that the BSP’s monetary operations “will remain guided by its latest assessment of liquidity conditions and market developments.”

During Wednesday’s auction, the 7-day tenor which has the same volume of P140 billion, received P179.14 billion tenders compared to the previous week’s P181.41 billion. The average interest rate was down to 1.7541 percent from 1.7737 percent.

The 14-day TDF, also keeping April 14’s offer volume of P350 billion, attracted P403.63 billion, lower than last week’s P453.36 billion. The yield fell to 1.7860 percent from 1.8097 percent.

According to Dakila, the BSP “kept its offer volume in the TDF auction at P490 billion with the same allocation for the 7-day and 14-day tenors at P140 billion and P350 billion, respectively.”

He also noted the oversubscription with the 7-day and 14-day TDF receiving tenders 1.28x and 1.15x their respective offer volumes. Total bids reached P582.77 billion which was lower than the previous auction’s P634.77 billion.

The weighted average interest rates for both tenors also continued to decline. The 7-day TDF rate decreased by 1.959 basis points (bps) while the 14-day TDF rate fell by 2.364 bps.

“The range of accepted yields in the 7-day TDF remained low and further narrowed to 1.700-1.772 percent while that for the 14-day TDF shifted lower but widened to 1.725-1.800 percent,” noted Dakila.