The auction of Bangko Sentral ng Pilipinas (BSP) securities continued to be oversubscribed but the average rate and bids were lower this week.
The 28-day BSP bills, still offered at P100 billion, received P153.98 billion tenders on Friday. Bids were lower compared to the previous auction of P183.25 billion.
The weighted average accepted yield dropped to 1.7309 percent compared to 1.7487 percent last August 13. The yields accepted ranged from 1.7150 percent to 1.7380 percent, which was narrower than the previous week’s 1.7400 percent to 1.7525 percent.
BSP Deputy Governor Francisco G. Dakila Jr. continue to say that there is strong interest from the market for the BSP bills. The auction was awarded in full.
The bid coverage ratio this week dropped to 1.5398 versus 1.8325 last week.
The BSP securities facility was launched in September 2020 to mop up liquidity injections from the BSP which has since reached more than P2.2 trillion. The facility complements the other liquidity-absorbing BSP tool or the term deposit facility (TDF).
The BSP has absorbed P2.1 trillion of liquidity or excess money supply as of end-March, with the TDF accounting for 39.4 percent of total liquidity absorbed. The securities facility only mopped up about 14.6 percent or P300.30 billion of excess liquidity during this period.