BSP bills’ rates climb as tenders go down

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) one-month securities went up on Friday as the offer went undersubscribed after the auction volume was upsized.

The 28-day BSP bills attracted just P68.714 billion in bids, well below the P100 billion placed on the auction block and the P86.74 billion in tenders for the P80-billion offer a week prior.

This translated to a bid-to-cover ratio of 0.6871 times, lower than the 1.0843 ratio seen in the previous auction.

The central bank awarded all the submitted bids.

Accepted rates ranged from 4.65% to 5.05%, a tad wider than the 4.65% to 5% band recorded the previous week. With this, the average rate of the one-month securities rose by 6.74 basis points to 4.8516% from 4.7842%.

The BSP has not auctioned off the 56-day bills for more than two months or since Nov. 3.

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 yields towards its policy rate.

The BSP bills also contribute to improved price discovery for debt instruments while supporting monetary policy transmission.

In August 2025, BSP Governor Eli M. Remolona, Jr. said they are gradually shifting away from the issuance of short-term papers to manage liquidity as they want to boost activity in the money market.

The central bank started auctioning off short-term securities weekly in 2020, initially offering only a 28-day tenor and adding the 56-day bill in 2023.

Data from the central bank showed that around 50% of its market operations are done through its short-term securities. — Katherine K. Chan