BSP raises P100 billion via one-month bills
The Bangko Sentral ng Pilipinas (BSP) raised P100 billion from short-term securities Friday, with rates rising amid increasing oil prices and following the retail dollar bond (RDB) offering of the national government.
The central bank fully awarded its 28-day bills which attracted bids of P147.84 billion, making the offer 1.48 times subscribed. Demand was also higher than the P139.55 billion in tenders a week earlier.
The average rate of the one-month securities was 1.7832%, up from 1.767% previously. Banks sought yields of between 1.74% and 1.825%, a narrower range than last week’s 1.7050% to 1.9676%.
Both the BSP bills and the term deposit facility are used to mop up excess liquidity in the financial system and guide market rates.
“The continued strong interest in the 28-day bills from eligible market participants remains in line with stable market conditions amid sustained ample liquidity in the financial system,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.
Rates on the central bank’s bills rose amid an increase in global oil prices, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Reuters on Friday reported that fuel prices increased nearly 5% this week after some industries started switching to oil from gas. There was also uncertainty whether the US government would release oil from its strategic reserves.
Mr. Ricafort said another factor for higher rates was likely the latest RDB issue “that siphoned off some of the excess liquidity in the financial system”.
The government sold $1.593 billion in RDBs. The offer ran between Sept. 15 and Oct. 1. – Luz Wendy T. Noble
