Awash with cash, banks line up for BSP’s term deposit offering

As funds returned to banks after the holiday season, the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) auction Wednesday attracted tenders that exceeded the total offering by over a fifth.

For the P30 billion in seven-day term deposits offered by the BSP, a total of P49.208 billion was tendered. The BSP fully awarded the one-week facility at a yield of 3-3.0995 percent.

As for the P150 billion in 28-day TDF, bids reached P172.051 billion. The yield for the one-month term deposits was within the range of 2.6-3.4875 percent.

“We continue to see oversubscription on both tenors as funds go back to the banking system after the holidays. We noticed the decrease in average rates for both tenors from last week’s auction (seven-day to 3.0465 percent from 3.0722 percent; 28-day to 3.357 percent from 3.3778 percent) as banks try to invest their excess funds,” BSP Governor Amando M. Tetangco Jr. said in a text message to reporters.

The BSP will again offer the same amount of term deposits on Jan. 18 and 25.

Tetangco noted that “there continues to be demand for the shorter-dated papers,” which “was also reflected in the oversubscription and tap of the three-year bond auction by the Bureau of the Treasury.”

Tetangco was referring to the Treasury’s offering also on Wednesday of the over-the-counter or tap facility for P15 billion in new T-bonds amid strong demand for the debt paper during Tuesday’s auction.

The Treasury’s first auction for 2017 was twice oversubscribed, as tenders reached P37.238 billion for the initial P15 billion. It was eventually awarded a rate of 3.364 percent. —BEN O. DE VERA