Yields on the term deposits offered by the Bangko Sentral ng Pilipinas Wednesday rose even as the demand from banks and trust institutions continued to be robust.
Wednesday’s auction saw the accepted yield for the 28-day term deposit facility (TDF) move up to 2.5-2.95 percent from 2.5-2.8 percent last week.
For the eight-day facility, the yield inched up to 2.5-2.5313 percent from 2.5-2.525 percent a week ago. The BSP offered eight days for the shorter tenor to cover the holiday on Nov. 30.
The P10-billion offering for the eight-day term deposits was oversubscribed, attracting P22.8 billion in tenders.
Bids for the P120 billion in 28-day TDF reached P150.5 billion.
“The auction results are as expected. The bid-to-cover ratio changes are beginning to reflect seasonality given these tenors would mature close to the holidays. We will continue to closely monitor market liquidity conditions to make sure this is sufficient as we approach the holiday season,” BSP Governor Amando M. Tetangco Jr. said in a text message to reporters.
For the shorter tenor, the bid coverage ratio dropped to 2.279 from 2.9598 last week; for the longer tenor, the ratio also slid to 1.2546 from 1.7275 a week ago.
At the TDF auctions on Dec. 1 and 7, higher volumes of P30 billion and P150 billion will be auctioned for the shorter and longer tenors, respectively.
By the middle of next year, trust entities would no longer have access to the BSP’s deposit facilities, as earlier announced by Tetangco.
A Nov. 18 memorandum issued by then BSP officer in charge Vicente S. Aquino said the Monetary Board, the BSP’s highest policymaking body, last Oct. 27 moved to discontinue trust entities’ placements in the overnight as well as term deposit facilities starting July next year.
“The BSP deposit facilities serve as a monetary policy instrument for managing domestic liquidity in the financial system. It is not intended to become an investment outlet of banks and trust entities,” Aquino said. —BEN O. DE VERA