THE BANGKO SENTRAL ng Pilipinas (BSP) made a full award of its short-term securities on Friday to raise P60 billion on strong demand amid ample liquidity in the financial system.
The central bank awarded P60 billion in 28-day bills as planned as demand reached P109.2 billion, making the offer almost twice oversubscribed.
This was the fourth consecutive week the BSP fully awarded the debt papers.
Yields on the short-term securities ranged from 1.84% to 1.86%, a slimmer band compared to the 1.825% to 1.86% last week. This caused the average rate of the one-month bills to settle at 1.8487%, higher by 0.64 basis point from the 1.8423% logged on Oct. 2.
“The sustained strong market interest for BSP bills continues to reflect ample liquidity in the financial system. Market participants are seen to have sufficiently integrated the BSP Securities Facility with their liquidity management,” BSP Deputy Governor Francisco G. Dakila, Jr. said in a statement.
The limited range of rates quoted for the BSP bills came amid strong liquidity, ING Bank NV-Manila Senior Economist Nicholas Antonio T. Mapa said on in an email on Friday.
This trend is also apparent in the BSP’s term deposit facility auctions, Mr. Mapa noted.
“Despite rates tiptoeing higher, we continue to expect the flood of liquidity from the BSP to keep borrowing costs floored, especially for rates at the short-end of the curve,” he said.
BSP Governor Benjamin E. Diokno on Friday said the central bank’s liquidity infusion has reached P1.9 trillion, which is equivalent to 9.6% of the country’s gross domestic product. This includes the P540 billion fresh provisional advance to the national government approved by the Monetary Board last week. — L.W.T. Noble