BSP’s term deposit offering undersubscribed

For the second straight week, both tenors of the term deposits offered by the Bangko Sentral ng Pilipinas (BSP) yesterday were undersubscribed as banks, according to a top official, were lending more.

For the P40-billion seven-day term deposit offering, tenders reached only P35.05 billion, which were all accepted by the BSP.

The yield for the one-week TDF further rose to 3.15-3.45 percent from 3.1-3.39 percent last week.

The bids for the P140-billion 28-day facility offering, meanwhile, amounted to only P106.19 billion.

The accepted yield for the one-month term deposits inched up to a range of 3.425-3.5 percent from last week’s 3.4-3.5 percent.

According to BSP Deputy Governor Diwa C. Guinigundo, the TDF auction results “continue to demonstrate that: One, banks have been funding more loans and investment in government securities; and two, short-dated placements are preferred by the market.”

“This is, after all, expected by the BSP because we want excess funds of the banks to be channeled to financing productive economic activities, including infrastructure,” Guinigundo said.

Next week, the BSP will again offer a total of P180 billion in TDF—P40 billion in seven-day and P140-billion in 28-day.

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.—BEN O. DE VERA