There is sustained oversubscription in the Bangko Sentral ng Pilipinas (BSP) term deposit facility (TDF) auction while the average interest rates have mixed results, according to BSP Deputy Governor Francisco G. Dakila Jr.
“There was oversubscription in both tenors with the 7-day and 14-day TDF receiving tenders 1.49x and 1.14x higher than their respective offer volume,” noted Dakila.
This week’s TDF auction received total tenders of P652.90 billion versus an adjusted volume of P530 billion. Last week, tenders reached P645.34 billion against offer of P520 billion.
The 7-day tenor, still offered at P140 billion, attracted P208.41 billion bids while its yield fell to 1.7261 percent from June 23’s 1.7376 percent. The tenders were lower than the previous P220.94 billion. The bid coverage ratio was at 1.4887, down from 1.5781 last week.
The 14-day TDF has a higher offer of P390 billion than June 23’s P380 billion. It received bids worth P444.48 billion while the yield increased to 1.8114 percent from 1.8085 percent. Bids were up from P424.40 billion last week. In the meantime, the bid coverage ratio rose to 1.1397 from 1.1169.
“The weighted average interest rate for the 7-day TDF continued to decline, settling 1.147 bps (basis points) lower to 1.7261 percent,” noted Dakila. He said the 14-day rate has been steady at 1.8114 percent . “The yields accepted in both tenors remained low but narrowed to a range of 1.700-1.735 percent for the 7-day TDF and 1.750-1.830 percent for the 14-day TDF,” he said.
Dakila said the auction of the weekly TDF – which is BSP’s main liquidity-mopping facility -- still indicate that banks prefer the longer tenor or the 14-day TDF amid ample liquidity.