Rates of central bank’s short-term bills mixed
YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) short-term securities ended mixed on Monday even as both tenors were oversubscribed.
The BSP bills fetched bids amounting to P160.207 billion, higher than the P140-billion offer and the P156.054 billion in tenders for the P150-billion auctioned off in the week prior. The central bank fully awarded both tenors.
The auction was moved to Monday from the usual Friday schedule due to the Eid al-Adha holiday on June 6.
Broken down, tenders for the 28-day BSP bills reached P63.802 billion, above the P60-billion offer but lower than the P66.877 billion in bids for the same volume auctioned off the previous week. The BSP made a full P60-billion award of the one-month papers.
Accepted rates ranged from 5.52% to 5.62%, lower and a tad narrower than the 5.535% to 5.637% band seen a week earlier. This caused the average rate of the one-month securities to inch up by 0.51 basis point (bp) to 5.5852% from 5.5801% previously.
Meanwhile, bids for the 56-day bills amounted to P96.405 billion, above the P80-billion offering and the P89.177 billion in tenders for the same volume offered by the central bank a week ago. The central bank fully awarded the two-month securities.
Banks asked for yields ranging from 5.5375% to 5.61%, narrower than the 5.535% to 5.62% margin seen a week prior. With this, the average rate of the 56-day securities dipped by 0.23 bp to 5.5823% from 5.5846% logged in the previous auction.
The BSP fully awarded the short-term bills as the offer was oversubscribed, it said in a statement. “The resulting bid-to-cover ratios were 1.06 times for the 28-day tenor and 1.21 times for the 56-day tenor.”
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 short-term market rates towards its policy rate.
The BSP bills also contribute to improved price discovery for debt instruments while supporting monetary policy transmission, the central bank said.
The central bank securities 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 its short-term securities.
The BSP bills are considered high-quality liquid assets for the computation of banks’ liquidity coverage ratio, net stable funding ratio, and minimum liquidity ratio.
They can also be traded on the secondary market. — Luisa Maria Jacinta C. Jocson
