TDF registers undersubscriptions, rates up

General

A Bangko Sentral ng Pilipinas (BSP) executive said domestic liquidity remains robust and can buoy credit demand as undersubscriptions were registered during the term deposit facility (TDF) auction on Wednesday despite lower offer volume.

The rates of both the one-week and two-week facilities also rose, data released by the BSP showed.

The BSP lowered the offer volume for the seven-day facility to PHP140 billion from PHP180 billion last week for the seven-day TDF, and to PHP180 billion from PHP250 billion for the 14-day.

Total tenders for the one-week facility amounted to PHP102.146 billion, which the auction committee fully accepted. The bid coverage ratio stood at 0.7296.

The average rate increased to 1.9595 percent from 1.9438 percent during the auction last April 20.

Bids for the 14-day TDF reached PHP174.178 billion, which was also fully accepted by the auction committee. The bid coverage ratio was at 0.9677.

The average rate of the facility jumped to 1.9680 percent from last week’s 1.9245 percent.

In a statement, BSP Deputy Governor Francisco Dakila Jr. said yields accepted for the one-week TDF “remained largely unchanged at a range of 1.8500-2.1800 percent” but it shifted higher for the two-week facility to between 1.8400-2.3900 percent.

“The undersubscriptions in the TDF auction could be attributed to improving credit activity as well as scheduled funding requirements for tax payments and government spending. Nevertheless, liquidity in the financial system remains ample to support the rise in credit demand,” he said.

He added monetary authorities “will continue to assess the latest liquidity conditions and market developments in its monetary operations strategy going forward.”

Source: Philippines News Agency

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