Banks yesterday snapped up the P40 billion in seven-day term deposit facility (TDF) offered by the Bangko Sentral ng Pilipinas during its last auction for the year.
Tenders reached P59.808 billion, such that the BSP fully awarded the term deposits at a yield of 3.3-3.499 percent.
Last week, the BSP also accepted P40 billion as banks were limited to only one remaining tenor of the facility.
“Based on our liquidity forecast, we need to mop up as much as P40 billion. Since the 28-day TDF was scrapped and the Bureau of the Treasury rejected all bids recently, banks competed for the unchanged volume of the seven-day TDF,” BSP Deputy Governor Diwa C. Guinigundo said last week.
In its auction of government securities on Dec. 19, the Treasury rejected the bids for the P20 billion in reissued five-year T-bonds it offered as the IOUs fetched higher rates and were undersubscribed.
In mid-December, the BSP reduced its TDF offering to P40 billion of the shorter tenor.
It will offer a similar volume of the same tenor on its first TDF auction for 2018 on Jan. 3.