Both tenors of the term deposit facility (TDF) auctioned off by the Bangko Sentral ng Pilipinas (BSP) yesterday were oversubscribed as total volume was reduced a week earlier to P140 billion.
For the P40-billion seven-day TDF, banks tendered P64.076 billion.
The BSP accepted the one-week term deposits at a yield of 3.23-3.38 percent, lower than the 3.32-3.4 percent range last week.
As for the P100-billion 28-day facility, bids reached P102.88 billion.
The one-month TDF was awarded at 2.5-3.5 percent, below last week’s yield of 3.45-3.5 percent.
Since last week, the BSP has been offering P40 billion in seven-day on top of P100 billion in 28-day TDF.
In September, the volume of the one-month term deposits was a higher P110 billion.
The BSP also earlier slashed to P150 billion the total TDF volume offered during the month of September from P180 billion previously mainly due to undersubscription.
BSP officials had said that the undersubscribed TDF auctions in recent months meant that banks’ excess liquidity were being infused into productive uses, including more lending for projects that boost economic growth.
Launched in June last year, the weekly TDF auctions form part of the BSP’s implementation of the interest rate corridor aimed at bringing market rates closer to the policy rate of 3 percent by mopping up excess liquidity.