BSP bills fetch mixed rates
YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) short-term securities ended mixed on Friday as the one-month tenor went undersubscribed.
The BSP bills fetched bids amounting to P181.216 billion on Friday, higher than the P150-billion offer and the P176.724 billion in tenders for the same volume auctioned off in the week prior. Still, the central bank awarded just P141.55 billion in securities as the one-month tenor was undersubscribed.
Broken down, tenders for the 28-day BSP bills reached P41.55 billion, below the P50-billion offer and the P58.659 billion in bids for the same volume auctioned off the previous week. The central bank accepted all tenders submitted for the tenor.
Accepted rates ranged from 5.82% to 5.8895%, a tad wider than the 5.825% to 5.89% band seen a week earlier. This caused the average rate of the one-month securities to increase by 0.58 basis point (bps) to 5.8628% from 5.857% previously.
Meanwhile, bids for the 56-day bills amounted to P139.666 billion, above the P100-billion offering and the P118.065 billion in tenders for the P90-billion offered by the central bank a week ago. The BSP made a full P100-billion award of the two-month securities.
Banks asked for yields ranging from 5.82% to 5.849%, lower than the 5.84% to 5.874% margin seen a week prior. With this, the average rate of the 56-day securities fell by 2.32 bps to 5.8344% from 5.8576% logged in the previous auction.
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 tenors of the Treasury bills and term deposits 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 has said. These are also considered high-quality liquid assets, giving banks more flexibility.
BSP securities can also be traded in the secondary market. — Luisa Maria Jacinta C. Jocson
