The Bangko Sentral ng Pilipinas’ term deposit facility remained undersubscribed as banks chose to use their funds to lend more to clients, instead of placing them with the Central Bank.
The auction of the 7-day tenor attracted only P32.44-billion bids Wednesday, lower than BSP’s total offer of P40 billion. Weighted average rates settled at 3.3162 percent.
The Bangko Sentral said it received total tenders of P109.86 billion for 28-day deposit facilities, also lower than the original offer of P140 billion. The 28-day debt facility had an average yield of 3.4961 percent.
“The decision to reduce the volume offering for the 28-day TDF is based on the recognition that the sustained economic expansion has also given rise to higher demand for credit. Banks are now lending more to their clients instead of placing their excess funds with the BSP,” Bangko Sentral Deputy Governor Diwa Guinigundo said.
Guinigundo said companies were also using their peso funds in the banks to buy foreign exchange for their import requirements.