BSP bills undersubscribed due to RTB offer
THE BANGKO SENTRAL ng Pilipinas (BSP) sold P139.75 billion in short-term securities on Friday, below the planned amount, amid the government’s ongoing of retail Treasury bond (RTB) offer.
Tenders for the 28-day bills auctioned off by the central bank on Friday were lower than the P140-billion offer and the P158.1 billion in bids last week.
Accepted rates for the one-month securities ranged from 1.64% to 2.08%, wider than the 1.627% to 1.685% margin last week. The average rate of the one-month bills was at 1.729%, higher than the 1.6699% in the previous auction.
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 BSP 28-day securities auction yield was higher week-on-week after the ongoing RTB offering siphoned off some of the excess liquidity from the financial system,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
The average yield also went up on higher inflation estimates from the central bank for this year and 2023, he added.
The government on Tuesday raised an initial P120.764 billion in its price-setting auction for its offer of five-year RTBs, which fetched a coupon rate of 4.875%.
The offer period for the peso-denominated debt is from Feb. 15 to 28, while settlement is on March 4.
Meanwhile, the BSP raised its inflation forecast for 2022 to 3.7% from 3.4% previously and to 3.3% from 3.2% for 2023.
Inflation risks continue to be the pork and fish supply shortages, along with the effect of higher oil prices on transport fares, the BSP said. — J.P. Ibañez
