BSP term deposit facility rates fall

Interest rates of the Bangko Sentral ng Pilipinas' (BSP) term facilities declined across the board Wednesday, with undersubscription posted by the shortest tenor.

Data released by the central bank showed that average rate of the seven day facility fell to 3.8943 percent from 4.0197 percent during the auction last February 5.

BSP offered the facility for PHP60 billion but banks submitted total tenders amounting to PHP49.66 billion, which the auction committee fully accepted.

The lower bids this week relative to the PHP64.814 billion tenders and the PHP60 billion offer last week resulted in the drop of the bid coverage ratio to 0.8277 from last week's 1.0802.

Average rate of the 14 day facility fell to 3.8772 percent from last week's 4.0197 percent.

It was offered for PHP60 billion and tenders reached PHP63.545 billion. The auction committee made a full award.

Bid coverage ratio slipped to 1.0591 from the previous auction's 1.0802. Last week, this facility received PHP64.814 billion worth of tenders, higher than the PHP60 billion offer.

Also, rate of the 28 day facility decreased to 3.9054 percent from 4.0419 percent last week.

Bid coverage ratio went down to 1.1364 from the previous week's 1.2707.

Bids amounted to PHP56.82 billion, higher than the PHP50 billion offer but lower than the PHP76.241 billion tenders last week when this tenor was offered for PHP60 billion.

There was a slight undersubscription in the 7 day TDF following the settlement of the NG's (national government) Retail Treasury Bonds on 11 February 2020, the BSP said in a statement.

Retail treasury bond (RTBs) are debt instruments targeted for small investors since minimum placement is PHP5,000.

The Bureau of Treasury (BTr) sold a total of PHP310.9 billion worth of three year RTB after offering the debt paper from January 28 to February 4, 2020.

Source: Philippines News Agency