Banks swarm BSP’s short term deposits

Bangko Sentral ng Pilipinas. INQUIRER.net FILE PHOTO

MANILA — Banks once more swarmed the Bangko Sentral ng Pilipinas’ term deposit facility (TDF) auction Wednesday, with the market showing appetite for shorter tenors.

Tenders for the P150 billion in 28-day term deposits offered reached a total of P204.045 billion

The accepted yield for the one-month facility was within the range of 3.3 percent and 3.43 percent.

As for the seven-day TDF, the auction was also oversubscribed with P51.07 billion in tenders for the P30-billion offering.

The BSP accepted bids for the one-week facility at a yield of between 3 percent and 3.02 percent.

“The TDFs remained choice instruments as markets continue to favor the short end of the curve,” BSP Governor Amando M. Tetangco Jr. told reporters in a text message.

On Feb. 22 and March 1, the BSP will again offer a total of P180 billion in term deposits—P30 billion in seven-day on top of P150 billion in 28-day.

“We kept the TDF auction size steady as these levels are still consistent with our liquidity forecast path,” Tetangco said.

Launched in June last year, the weekly TDF auctions form part of the implementation of the BSP’s interest rate corridor, aimed at bringing market rates closer to the policy rate of 3 percent.

The TDF auctions mop up excess liquidity in the system.  SFM