BSP fully awards offer of short-term bills
THE CENTRAL BANK fully awarded the short-term securities it auctioned off on Friday as the tenor’s average yield eased on increased demand.
The Bangko Sentral ng Pilipinas (BSP) raised P100 billion as planned from its offer of 28-day bills that attracted P211.39 billion in tenders, more than double the P104.56 billion in bids seen on Dec. 17.
Accepted rates for the one-month debt papers ranged from 1.72%-1.78%, lower than the 1.785%-1.98% band seen the previous week.
This brought the average rate of the one-month securities to 1.7666%, down by 8.68 basis points from the 1.8534% fetched during the previous offering.
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.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the average yield on the BSP bills eased on higher demand.
He also attributed the lower yield to slower inflation and the continued rejection of bids for Treasury bonds (T-bond).
“BSP 28-day auction yield also lower amid recent concerns over the resurgence of COVID cases locally and worldwide amid lingering concerns over the Omicron variant and the increase in COVID cases,” he said in a Viber message.
Inflation eased to 3.6% in December, the lowest in 12 months, amid a slower increase in food and transport prices.
Still, the full-year inflation average of 4.5% exceeded the central bank’s 2-4% target.
Meanwhile, the Treasury rejected all bids for its offer of reissued seven-year T-bonds on Tuesday as bids exceeded market expectations even as inflation eased.
The government also rejected all bids for its two T-bond offerings in December.
National Treasurer Rosalia V. de Leon said the government’s cash position can comfortably meet funding requirements despite these rejections. — J.P. Ibañez
