Yields on BSP’s term deposits inch lower

Yields on term deposits auctioned off by the Bangko Sentral ng Pilipinas (BSP) edged lower on Wednesday, even as the offer went undersubscribed, central bank data showed.

Bids for the BSP’s term deposit facility (TDF) hit PHP 338.589 billion on Wednesday, lower than the PHP 400 billion on the auction block but higher than the PHP 303.661 billion in tenders seen a week earlier.

Broken down, the one-week papers attracted tenders totaling PHP 182.415 billion, below the PHP 200 billion auctioned off by the BSP as well as the PHP 170.144 billion in bids for a PHP 150-billion offer the previous week.

Accepted yields for the seven-day deposits ranged from 6.53% to 6.575%, a wider margin compared with the 6.53% to 6.57% seen on March 6. With this, the average rate of the papers stood at 6.5616%, a tad lower than the 6.5617% seen a week ago.

For the 14-day term deposits, bids totaled PHP 156.174 billion, lower than the PHP 200 billion on offer. Still, this was higher than the PHP 133.517 billion in tenders last week for PHP 120 billion on the auction block.

Banks asked for returns ranging from 6.579% to 6.615%, a thinner band versus the 6.5745% to 6.615% seen in the previous auction. This brought the average rate of the two-week deposits to 6.5915%, down by 0.36 basis point from the 6.5951% logged last week.

The BSP has not auctioned off 28-day term deposits for more than three years to give way to its weekly offerings of securities with the same tenor.

The term deposits and the 28-day bills are used by the central bank to mop up excess liquidity in the financial system and to better guide market rates.

TDF yields went down on Wednesday following the government’s latest retail Treasury bond (RTB) issuance, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The government raised a record PHP 584.86 billion from its offering of five-year RTBs last month. This exceeded the Bureau of the Treasury’s PHP 400-billion target.

The five-year RTBs fetched a coupon rate of 6.25%. — L.M.J.C. Jocson