By Chino S. Leyco The Bangko Sentral ng Pilipinas (BSP) awarded the entire offer for the seven-day term deposits auctioned off yesterday as banks were limited to just one tenor of the facility. Lenders snapped up the P40 billion in one-week term deposit facility (TDF) offered by the BSP during its first auction for the year. Banks tendered R95.55 billion, such that the central bank fully awarded the term deposits at a yield of 3.25 percent to 3.4 percent, while weighted average at 3.3654 percent. Sought for comment, BSP Deputy Governor Diwa C. Guinigundo said that liquidity is back after a nearly weeklong holidays, noting the central bank would  also soon restore the 28-day facility owing to increasing investor appetite. “They are now more liquid and they need to place their money very quickly. That would explain the tighter competition and lower rates,” Guinigundo told reporters in a mobile message. “We shall restore the 28 days TDF in due time as liquidity normalizes after the holidays and the banks have more regular view of their investment horizon,” he added. The BSP is currently offers the short-term seven-day TDF and the long-term 28-day TDF. These have been in place since mid-2016 when the BSP formally adopted the interest-rate corridor (IRC) system as framework for conducting monetary operations. However, banks showed apparent preference for short-dated TDFs as evidenced by persistent undersubscription of the long-dated tenor that contrasted sharply against the oversubscription in the seven-day equivalent. In recent weeks, the BSP opted against offering 28-day term deposits due to weak demand for the facility. On the TRAIN, Guinigundo said the impact on inflation is less than one percentage point, but hardly justifies a monetary response from the BSP as the impact is on the supply side. “We shall consider adjusting our monetary stance when second round effects are triggered because the demand side would be upset, generating demand pressure for higher wages and higher transport fares,” he said.