The Bangko Sentral ng Pilipinas plans to add another tenor to its weekly auction of term deposits amid the oversubscription in the past few weeks as liquidity returned to the financial system after the holiday season, Deputy Governor Diwa Guinigundo said over the weekend.
The term deposit facility auction under the interest rate corridor system currently has three tenors: the seven-day, 14-day and 28-day instruments. Bangko Sentral last month introduced the 14-day tenor in addition to the week-long and month-long term deposits.
“It is a process… We cannot accelerate the process without first monitoring the developments as well as the temperament of our counter parties,” Guinigundo said.
“So introducing another tenor will require, again, a return to the consultative table or consultation table with banks and asking them if it’s okay for them to make an additional tenor,” Guinigundo said, adding that what was remaining was the 21-day tenor.
He said the Bangko Sentral did not want to “surprise the market” and the addition of the 14-day tenor was based on its consultation with the banks that indicated their “strong interest” in an intermediate tenor.