Central bank fully awards offer of short-term bills
THE BANGKO SENTRAL ng Pilipinas (BSP) made a full award of the 28-day bills it offered on Friday as rates dropped due to the peso’s appreciation and flows from tax payments.
The central bank raised P100 billion as planned from its auction of the one-month securities, with demand amounting to P151.5 billion, making the offer 1.5 times oversubscribed. This was higher than the P141.25 billion in bids for the previous auction.
The average rate of the 28-day debt papers stood at 1.8052%, down by 2.34 basis points from the 1.8286% quoted previously. Investors asked for yields ranging from 1.79% to 1.82%, slightly lower than the 1.7925% to 1.844% band seen a week ago.
The short-term bills and the term deposit facility are tools used by the central bank to mop up excess liquidity in the system and guide short-term rates.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the lower yields for the BSP bills came following the appreciation of the peso.
The peso closed at P48.315 per dollar on Thursday, stronger by 16.2 centavos against its P48.477 close on Wednesday, based on data from the Bankers Association of the Philippines.
Mr. Ricafort added that tax flows during the month due to the April 15 deadline for payments also caused rates to go down as this boosted the government’s cash position. — LWTN
