BSP jacking up term deposit offerings in Aug.

The Bangko Sentral ng Pilipinas (BSP) has jacked up to P70 billion the total volume of term deposits to be offered in August, as banks once again swamped the fully awarded auction Wednesday.

In an advisory, the BSP said it would offer P10 billion in seven-day and P60 billion in 28-day term deposits at the auction on Aug. 3.

The BSP has been offering P40 billion in 28-day term deposits and P10 billion in seven-day deposits or a total of P50 billion every auction this month.

In June, the maiden month of the term deposit facility (TDF) auctions, the total offering was only P30 billion, as only P20 billion in 28-day and P10B in seven-day term deposits was auctioned off.

Wednesday’s auction was oversubscribed with tenders hitting P177.8 billion or more than thrice bigger than the P50-billion offering.

The BSP sold all P10 billion in seven-day term deposits out of the P48.4 billion tendered, while P30 billion in the 28-day facility was awarded out of the P129.4 billion in bids.

The accepted yield remained at 2.5 percent.

The BSP will again sell P50 billion in term deposits next week before jacking up the offering next month.

Starting June, the BSP has been holding weekly TDF auctions under the IRC, aimed at mopping up excess liquidity and tempering volatility in market rates by moving them toward the policy rate of 3 percent.

The BSP earlier made operational adjustments ahead of the implementation of the IRC.

The overnight lending facility—the upper bound of the corridor—was cut to 3.5 percent from the former repurchase (RP) facility of 6 percent, while the policy rate or reverse repurchase (RRP) facility had been converted into overnight, with its rate cut to 3 percent from the previous RRP facility of 4 percent.

The BSP kept the overnight deposit facility or the former special deposit accounts (SDA) rate of 2.5 percent, which serves as the lower bound of the corridor.