BSP bills up, still oversubscribed

Published September 20, 2021, 10:22 AM

by Lee C. Chipongian

The auction of Bangko Sentral ng Pilipinas (BSP) securities was oversubscribed by 1.235x last Friday (September 17) amid sustained good demand from banks, according to BSP Deputy Governor Francisco G. Dakila Jr.

Dakila said the 28-day BSP bills still have an offer volume of P110 billion which was awarded in full.

“The bill auction was oversubscribed as total bids reached P135.80 billion or equivalent to about 1.235x the offered volume,” he said. Friday’s bid was lower than the P137.82 billion tenders last September 10. The bid coverage ratio dropped to 1.2345.

The 28-day BSP bills fetched a weighted average interest rate of 1.7190 percent, up by 0.088 basis points week-on-week. The range of yields accepted was almost unchanged at 1.7000 percent to 1.7400 percent compared to the previous auction.

“The results of the auction remain in line with prevailing normal market conditions amid sustained ample liquidity in the financial system,” said Dakila. “Looking ahead, the BSP’s monetary operations will continue to be guided by its latest assessment of liquidity conditions and market developments,” he reiterated.

BSP Deputy Governor Francisco G. Dakila Jr.

The BSP increased the volume of the securities facility this month, from P100 billion to P110 billion. It was the first time since April this year that the BSP bills’ offer was adjusted. The highest offering for this year was P120 billion.

The BSP bills was introduced in September last year as one more liquidity-mopping facility to help the BSP control and manage inflation. Since the pandemic started, the BSP has released about P2.3 trillion of bank liquidity in the financial system.