BSP bills fetch higher rate despite strong demand
THE BANGKO SENTRAL ng Pilipinas’ (BSP) short-term securities fetched a higher average yield for a second straight week on Monday, even as the offer was oversubscribed.
The 28-day BSP bills attracted P76.3 billion in bids, exceeding the P70 billion auctioned off but below the P93.402 billion in tenders for the P60 billion placed on the auction block in the prior week.
“The BSP raised the offer volume from P60 billion in the previous week to P70 billion,” the central bank said in a statement. “Total tenders reached P76.3 billion, resulting in a bid-to-cover ratio of 1.09 times.”
The ratio was lower than the 1.5567 recorded in the previous auction.
However, the central bank still made a full P70-billion award of its offer.
Accepted rates were from 4.4% to 4.69%, wider and higher than the 4.275% to 4.498% margin logged on April 24. This caused the average accepted rate of the one-month papers to jump by 12.43 basis points week on week to 4.5207% from 4.3964%.
The BSP has not auctioned off the 56-day bills 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 help 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.
The central bank began auctioning off short-term securities weekly in 2020, initially offering only a 28-day tenor and adding the 56-day bill in 2023.
In its February 2026 Monetary Policy Report, the central bank said it has limited its BSP securities offerings to a single tenor to rationalize its liquidity operations and focus on tenors that would boost monetary policy transmission.
As of mid-February, the central bank’s monetary operations have siphoned off P1.2 trillion in liquidity from the market. Of this, 28.5% was absorbed through BSP securities, while 44.4% were done through overnight reverse repurchase facility, 18.2% via the overnight deposit facility, and 9% from the term deposit facility. — K.K. Chan
