THE BANGKO SENTRAL ng Pilipinas (BSP) fully awarded its offer of one-month securities on Friday, with its average rate going down following the government’s retail bond offering. 

The central bank awarded P80 billion in short-term bills as planned as the offer fetched bids worth P105.85 billion, making it oversubscribed by 1.32 times. This was also higher than the P102.042 billion in demand seen a week earlier. 

Accepted rates for the 28-day bills were from 1.77% to 2.038%, slimmer than the 1.76% to 2.09% logged in the prior auction. With this, the average rate of the papers stood at 1.8653%, down by 0.96 basis point from 1.8749% previously. 

The central bank uses its short-term securities and term deposit facility to mop up excess liquidity in the financial system and guide market rates. 

The average rate of the central bank’s one-month bills dipped as the national government’s cash position increased following its retail Treasury bond (RTB) issue, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. 

The Bureau of the Treasury sold P360 billion in five-and-half-year RTBs after a two-week offer. Proceeds from the issuance will be used to fund the government’s pandemic response and recovery programs. — LWTN