THE BANGKO SENTRAL ng Pilipinas (BSP) fully awarded its offer of short-term bills on Friday even as banks asked for higher yields following the increase in US Treasury rates ahead of the Federal Reserve’s policy review. 

The BSP raised P110 billion as programmed via its offer of 28-day bills on Friday, with tenders reaching P135.8 billion. However, the demand was lower than the P137.82 billion in bids seen last week. 

Accepted rates ranged from 1.7% to 1.74%, a slightly narrower margin compared to the 1.7% to 1.7415% band logged during the previous auction. This caused the average rate of the bills to increase by 0.09 basis point (bp) to 1.719% from the 1.7181% quoted previously. 

The BSP bills and the term deposit facility are used by the central bank to gather excess liquidity in the financial system and guide market rates.  

Rates for the BSP’s one-month bills inched up to track US Treasury yields’ ascent ahead of the Federal Open Market Committee meeting next week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said. 

The yield on the 10-year US Treasuries on Thursday increased 2.9 bps to 1.333%, while the rate of the 30-year paper inched up 1.2 bps to 1.881%, Reuters reported.  

The Fed will review its policy settings on Sept. 21 to 22. The market is waiting for more hints regarding the timeline of their plan to wind down asset purchases. 

Following its July meeting, the Fed said it will keep rates low until the US economy has achieved maximum employment and inflation settles at 2% over the longer run. 

Mr. Ricafort said the higher yields sought by banks for the BSP bills reflects how the retail dollar bond (RDB) offering of the national government “siphoned off some of the excess liquidity in the financial system”. 

The Bureau of the Treasury on Wednesday raised an initial $866.2 million through its maiden sale of RDBs. It borrowed $551.8 million from the five-year notes and $314.4 million via the 10-year RDBs during the price-setting auction. — L.W.T. Noble 

THE Development Bank of the Philippines (DBP) extended loans worth P8.5 billion in the first half of the year to support firms’ recovery from the impact of the coronavirus pandemic. 

The loans were extended to 90 firms across the country under the bank’s Rehabilitation Support Program on Severe Events (RESPONSE) and its sub-program that caters to micro-, small-, and medium-sized enterprises (MSMEs), DBP President and Chief Executive Officer Emmanuel G. Herbosa said in a statement on Friday. 

Broken down, 43% or P4.8 billion of the loans went to 30 borrowers mainly in Luzon with businesses related to accommodation and food service industries, wholesale and retail trade, public administration and defense, manufacturing, financial and insurance activities, and other service activities. 

Meanwhile, the loan program’s sub-unit catering to MSMEs extended credit worth P3.7 billion to 60 borrowers. This financed 24 projects in Mindanao, 21 in Visayas and 15 in Luzon that were focused on wholesale and retail trade, financial and insurance activities, agriculture, forestry and fishing, and accommodation and food service industries.  

“DBP is poised to provide the strategic assistance to our development partners in the business community and to fellow government institutions as they improve current systems and boost continuity programs to mitigate the impact of future crisis situations,” Mr. Herbosa said. 

The RESPONSE program of the bank caters to DBP and non-DBP borrowers affected by calamities such as typhoons, floods, drought, pest and disease infestations, earthquakes, peace and order problems, and other similar events that cause significant socio-economic damages.  

Loans granted under the program have a repayment period of up to 15 years inclusive of a three-year grace period for public borrowers and up to 10 years with a three-year grace period for private institutions. 

Meanwhile, the sub-program for MSMEs offers low interest rates and flexible terms for registered medium enterprises, including start-ups and cooperatives engaged in agri-fishery and non-essential businesses. It also includes wholesale lending to rural banks, thrift banks, microfinance-oriented banks, cooperatives and microfinance institutions, which in turn can be tapped for relending to MSMEs.  

DBP’s net income dropped 62% to P547.83 million in the first quarter from P1.455 billion a year earlier as its operating expenses climbed. 

The lender, which is the country’s designated infrastructure bank, was the sixth largest in the country in terms of assets with P1.102 trillion as of March, based on central bank data. — L.W.T. Noble 

BANKING VETERAN Ramon Y. Sy passed away on Sept. 16. He was 91. 

His death was confirmed by Apex Mining Co., Inc. where he served as chairman until his death, as well as Asia United Bank Corp. (AUB), where Mr. Sy served as vice chairman and a director since March 2012.  

Mr. Sy was known for his humble beginnings as a messenger at the former Manila branch of Bank of America while attending night classes to finish his studies. He rose from the ranks and eventually became the bank’s country manager. 

AUB on Friday said Mr. Sy was instrumental in the bank’s initial public offering roadshows and public listing in 2013. 

“Mr. Sy, the AUB family is grateful for the years you have dedicated and shared with us. We have nothing but respect and admiration for you, and we will always be grateful for your mentoring and inspiration,” AUB President Manuel A. Gomez was quoted as saying. 

Mr. Sy also previously served as president and chief executive officer of the United Coconut Planters Bank and the International Exchange Bank. He was likewise with the Metropolitan Bank and Trust Corp. in the past as vice chairman. 

He obtained a Commerce degree from the Far Eastern University. He also holds a master’s degree in Business Administration from the University of the Philippines. 

Mr. Sy is survived by his wife, three children, and his grandchildren. — LWTN 

THE PESO appreciated versus the greenback on Friday as more vaccines arrived in the country. 

The local unit closed at P49.95 per dollar on Friday, gaining two centavos from its P49.97 finish on Thursday, data from the Bankers Association of the Philippines showed.  

However, it depreciated by 8.5 centavos from its P49.865-a-dollar finish a week earlier.      

The peso opened at P50.04 against the dollar on Friday. Its weakest showing was at P50.05, while its intraday best was at P49.86 versus the greenback. 

Dollars traded slumped to $871.75 million on Friday from $1.273 billion on Thursday. 

The peso strengthened as more vaccine doses arrived in the Philippines, boosting prospects for herd immunity and economic recovery, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said. 

Additional 661,200 doses made by AstraZeneca Plc arrived in the Philippines on Friday morning. They were procured by the private sector through the national government. 

The Philippines has already received over 58.2 million doses of coronavirus vaccines since February. 

Meanwhile, a trader said the peso appreciated on the back of profit-taking ahead of the US consumer sentiment report expected to be released on Friday night.