BSP’s term deposits get strong demand

High liquidity situation in the country continued to drive demand for the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF), which registered a mixed direction for its interest rates on Wednesday, according to a report by Philippine News Agency.

Data released by the central bank showed that the average rate of the seven-day facility rose to 1.7227 percent from last week’s 1.7128 percent, while the rate of the 14-day TDF declined to 1.7227 percent from the previous week’s 1.7259 percent. 

The BSP hiked the offer volume for the one-week facility, which is among the central bank's tools to mop up excess liquidity from the system to PHP240 billion from last week’s PHP220 billion.

The offer volume for the two-week TDF was also increased to PHP310 billion from PHP290 billion. Both were fully awarded. 

Total tenders for the seven-day TDF reached PHP240.097, which resulted in a bid coverage ratio of 1.004.

Bids for the two-week facility amounted to PHP411.461 billion. 

The bid coverage ratio stood at 1.3273. 

In a statement, BSP Deputy Governor Francisco Dakila Jr. said results of this week’s TDF auction “continue to show that liquidity in the financial system remains ample, with market preferences possibly shifting to longer tenors.”

“Looking ahead, the BSP’s monetary operations will continue to be guided by its assessment of the latest liquidity conditions and market developments,” he added.