Banks looking for new TDF tenor

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Banks want the Bangko Sentral ng Pilipinas (BSP) to offer a new tenor for the liquidity-mopping term deposit facility (TDF), a senior official said.

“Based on our initial discussion with the banks — these are initial, preliminary discussions — they prefer a third tenor, probably a cross between seven and 28 days,” central bank Deputy Governor Diwa Guinigundo told reporters.

“Whatever that is, it is something [that will be]subject to discussion between BSP and the banks,” he continued.

The BSP has, since December 20, stopped selling the 28-day tenor, limiting the facility to a seven-day offering worth a total of P40 billion.


The decision was based on a careful liquidity assessment, Guinigundo previously said.

The TDF is one of the liquidity-mopping tools introduced by the BSP following the adoption of the interest rate corridor in June 2016. It aims to improve the central bank’s influence on market rates and ultimately enhance monetary policy.

During the last auction of the year, the P40-billion TDF was oversubscribed as bids reached P59.8 billion. The central bank made a full award and yields for the seven-day tenor fell to 3.3995 percent from 3.4004 percent.

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