RATES fetched under the term deposit facility (TDF) saw mixed movements yesterday, with banks continuing to crowd the week-long tenor as players look for opportunities to deploy their excess liquidity.

Demand for term deposits remained skewed towards the seven-day tenor on Wednesday according to the Bangko Sentral ng Pilipinas (BSP), with total tenders at P153.379 billion, slipping from last week’s P180.174 billion and below the P180-billion offer.

The seven-day term deposits remained oversubscribed, with tenders at P50.051 billion, slipping from the P60.818 billion received last week but remaining above the P40 billion which the central bank wanted to auction off.

As bids remained above offer, returns sought by banks dipped to 3.3241%, coming from the previous week’s 3.3327% average rate as the players asked for margins within 3.3-3.35%.

Meanwhile, the 28-day tenor continued to attract bids below the P140-billion offering to settle at P103.328 billion, which the central bank accepted. Yields averaged 3.4958%, picking up from last week’s 3.4936% and hovering closer to the BSP’s 3.5% ceiling rate.

Since June 2016, the TDF has been the central bank’s main platform to capture excess money supply in the financial system, where banks can park idle funds for a small return.

BSP Deputy Governor Diwa C. Guinigundo has said the financial system remains liquid, with banks holding more than enough cash to grant more loans, buy more dollars, and get hold of more debt papers. Those left untapped after these investment activities would find its way to the TDF.

For next week, the central bank kept the auction volume steady at P180 billion, divided into P40 billion under the week-long term and P140 billion for the month-long term deposits. — Melissa Luz T. Lopez

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