The P180 billion worth of term deposits offered by Bangko Sentral ng Pilipinas was slightly undersubscribed Wednesday, amid weak demand for the month-long deposits.
Data from Bangko Sentral showed that total tenders reached P179.94 billion, slightly lower than the P180-billion volume.
The seven-day P30-billion deposits lured total bids of P39.186 billion, with a weighted average accepted yield of 2.98 percent. The month-long deposits, however, attracted total tenders of just P140.76 billion, or P10 billion short of the P150 billion offered to banks and trust entities.
“There is more preference for the seven-day instrument because the market is positioning for any opportunistic short-term propositions. This is the reason why despite the increase in bid to coverage ratio for the 7-day TDF, weighted interest rate stood at a higher level of 2.52 percent,” Bangko Sentral Deputy Governor Diwa Guinigundo said in a text message.
“On the other hand, despite the lower bid to cover ratio, 28-day TDF weighted interest rate actually declined to a lower level of 3.30 percent. Should there be actual liquidity tightening, all that the banks have to do is to withdraw from the liquidity facilities of the BSP to fund loans, investments, FX purchases and even public spending on power and infra,” Guinigundo said.