BSP bills auction 1.14x oversubscribed

Published September 24, 2021, 6:56 PM

by Lee C. Chipongian

The central bank’s auction of 28-day securities on Friday was 1.14 times oversubscribed with P125.35 billion bids against offer of P110 billion.

BSP bills auction still oversubscribed

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila Jr. said the BSP bills was “offered and awarded in full amid sustained interest from market participants.”

The bid coverage ratio improved to 1.1395 from 1.2529 last September 17.

The tenders received on Friday was lower than the previous week’s P135.80 billion which was 1.235 times equivalent to the offered volume, also P110 billion.

Dakila said the weighted average interest rate continued to increase slightly from the previous week. The yield rose by 0.372 basis point to 1.7227 percent. “The yields accepted in the auction remained low but widened to a range of 1.7025-1.8250 percent,” he added.

Dakila said they expect the auction to “continue to reflect stable market conditions” in the next weeks.

The BSP will adjust the offer depending on their assessment of liquidity conditions and market developments.

The BSP increased the offer size from P100 billion to P110 billion last September 10. It was the first time since April this year that the offering was increased. The highest volume so far for 2021 was P120 billion which was in February.

As pandemic response and to alleviate market worries, the BSP has injected P2.3 trillion of bank liquidity into the financial system since March 2020. Bulk of this liquidity has gone back to the BSP’s open market operations, the term deposit facility and the BSP bills.