Bangko Sentral ng Pilipinas on Wednesday awarded P157.34 billion worth of term deposits during its regular auction.
Bangko Sentral said the term deposit auction for the seven-day deposit facilities was oversubscribed as total tenders amounted to P40.84 billion, exceeding the original offer of P40 billion.
Rates for the 7-day debt facility settled at 3.3124 percent.
The central bank said it received total tenders of P117.34 billion for 28-day deposit facilities, lower than the original offer of P140 billion.
The average rates for the 28-day debt facility was 3.4958 percent.
“We expect this turnout based on the trend of banks’ preference to increase their lending to both their individual and corporate clients. The 7 day TDF remains oversubscribed but fetched lower rates on account of the steady and limited offering of P40 billion plus the increased cash requirements for the long weekend,” Bangko Sentral Deputy Governor Diwa Guinugundo said in a text message.
He said the 28-day TDF had higher subscription but still lower than the offering of P140 billion.
“Note that the interest rate was steady at 3.4958 percent on account of higher demand for loans and the long weekend as well. I wish to clarify that the results of the weekly auction should be appreciated in medium term context because weekly auctions reflect the fluidity of cash operations of the banks against our liquidity forecasts,” Guinugundo said.
“BSP’s announcement of the periodic volume of offering should signal to the market our reading of monetary conditions that would in turn be an input to the price discovery process. The market response to such announcements will complete the loop and we should have a more active, more market based auction for TDF,” he added.