BSP securities’ rates mixed as demand slips
YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) short-term securities ended mixed on Friday as the two-month bills went undersubscribed.
The central bank securities fetched bids amounting to P185.96 billion on Friday, higher than the P170-billion offer but slightly below the P186.394 billion in tenders for the P200 billion auctioned off a week prior.
Broken down, tenders for the 28-day BSP bills reached P88.323 billion, above the P70-billion offer and the P74.195 billion in bids for the P100 billion auctioned off the previous week.
Banks asked for yields ranging from 5.7% to 5.839%, narrower than the 5.64% to 5.9% band seen a week earlier. This caused the average rate of the one-month securities to inch down by 0.19 basis point (bp) to 5.8119% from 5.8138% previously.
Meanwhile, bids for the 56-day bills amounted to P97.637 billion, lower than the P100-billion offering and the P112.199 billion in tenders for the same volume auctioned off the week prior. The BSP awarded all the submitted bids.
Accepted rates for the two-month tenor were from 5.73% to 5.9%, higher than the 5.65% to 5.875% margin seen a week prior. With this, the average rate of the securities rose by 1.81 bps to 5.8048% from 5.7867% logged in the prior auction.
The central bank increased last week’s total offering of BSP bills (BSPB) compared to the volume put up for auction previously, BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.
“Total tenders received fell slightly to P185.96 billion (from P186.394 billion) and resulted in bid-to-cover ratios of 1.26 times for the 28-day BSPB and 0.98 times for the 56-day BSPB. The BSP fully awarded its offering for the 28-day BSPB and accepted the P97.637-billion worth of total tenders for the 56-day BSPB.”
The central bank uses the BSP securities and its term deposit facility to mop up excess liquidity in the financial system and to better guide market rates.
The BSP bills were calibrated to not overlap with the Treasury bill and term deposit tenors also being offered weekly.
Data from the central bank showed that around 50% of its market operations are done through the short-term BSP bills.
Short-term instruments offer more stability and predictability, the BSP earlier said. These are also considered “high-quality liquid assets” and grants more flexibility for banks versus term deposits, which are not tradable. — Luisa Maria Jacinta C. Jocson
