7-day TDF attracts higher bids

FILE: Bangko Sentral ng Pilipinas (BSP) (Photo: Bangko Sentral ng Pilipinas/Facebook)

MANILA — Yield of the Bangko Sentral ng Pilipinas’ (BSP) seven-day Term Deposit Facility (TDF) declined Wednesday but its bid coverage ratio improved after the facility attracted bids higher than the offering.

Data released by the central bank showed that weighted average accepted yield of the shorter-dated facility went down to 3.4004 percent from 3.4542 percent during the auction last week.

However, its bid coverage ratio improved to 1.1553 from last week’s 0.9730 after the PHP40 billion offering was met by tenders amounting to PHP46.212 billion.

Citing the central bank’s liquidity forecast, BSP Deputy Governor Diwa Guinigundo said the projection is for the BSP to mop up as much as PHP40 billion in this week’s auction.

“Since the 28-day TDF was scrapped and the BTr rejected all bids recently banks competed for the unchanged volume of the seven-day TDF,” he said.

Last week, the BSP announced that it will not be offering the 28-day facility due to sustained undersubscription in the recent weeks.

This is due in part to the recent sale by the Bureau of the Treasury (BTr) of Retail Treasury Bond (RTB), wherein it issued a total of PHP255.4-billion worth of five-year retail securities.

RTBs are called as such because they are intended for small investors, since minimum placement is PHP5,000 and additional investments are also on increments of PHP5,000. (PNA)
For the TDF auction on Dec. 27, the BSP will still be offering only the seven-day facility for PHP40 billion. (PNA)