Business and Economy
FMIC exec welcomes possibility of 3rd TDF tenor
FILE: In an interview, FMIC Senior Vice President Christopher Ma. Carmelo Y. Salazar said the third tenor would probably be a 14-day facility since it is between the current seven-day and 28-day facilities. (Photo: firstmetro.com.ph)
MANILA — An official of First Metro Investment Corp. (FMIC) welcomes the news about the possibility of the central bank introducing a third Term Deposit Facility (TDF) tenor, citing that this will be an additional option for banks to temporarily keep their excess funds.
In an interview, FMIC Senior Vice President Christopher Ma. Carmelo Y. Salazar said the third tenor would probably be a 14-day facility since it is between the current seven-day and 28-day facilities.
He said this tenor “could be more viable than the 28 days because market is looking for short-term.”
“After all it’s just excess fund at the moment. They just want to park it somewhere to earn but you don’t want to tie it up there for a long time,” he told journalists after FMIC’s economic briefing Thursday.
Salazar added that a 14-day facility might be something that would work for now “until the liquidity comes back”, referring to undersubscription in the longer tenor TDF in the last months of 2017.
The Bangko Sentral ng Pilipinas (BSP) has cancelled the auction for the 28-day TDF in the last three weeks of December because banks have submitted bids that are less than the PHP40 billion offering.
BSP Deputy Governor Diwa Guinigundo earlier said they understood banks’ decision to offer less for the 28-day TDF given the high liquidity requirements of their clients during the holidays.
He said BSP and bank officials are now in talks on the possible introduction of a third TDF tenor but stressed that discussions are on early stages.
BSP introduced the TDF facility in June 2016 to provide banks additional option to park excess funds. (PNA)
