The central bank’s auction of 28-day Bangko Sentral ng Pilipinas (BSP) securities received more bids last Friday resulting to a 1.63x oversubscription, according to BSP Deputy Governor Francisco G. Dakila Jr.
“The BSP continued to offer P100 billion in the 28-day bill auction which was awarded in full amid good demand,” said Dakila. The BSP bills received P162.69 billion tenders versus offer of P100 billion. Its bid coverage ratio stood at 1.6269 which was higher than 1.0541 last June 4.
Its weighted average interest rate also continued to increase to 1.7965 percent. It is 1.075 basis points higher than the previous week’s average yield.
“The rise in the 28-day bill rates is in line with market participants’ continued search for yield amid low interest rates and ample financial system liquidity,” noted Dakila.
He also said yields accepted in the auction remained low and narrowed to a range of 1.755 percent to 1.870 percent.
The BSP first offered BSP bills on September 18, 2020. By end-2020, the securities facility absorbed 11.2 percent or P224 billion of the P2 trillion total liquidity that BSP released as part of its COVID-19 response last year.