BSP sees room to scale up TDF operations


THE Bangko Sentral ng Pilipinas sees more room to scale up term deposit facility (TDF) auctions towards sustainable levels, after an increase marked the latest bid-to-cover ratios.

Central bank data released on Wednesday showed the bid-to-cover ratio for the seven-day TDF rose to 4.128 from the 3.332 percent last week.

The bid-to-cover ratio of the 28-day facility rose to 2.344 percent from 2.033 percent.

The ratio compares the number of total bids in an auction with the number of acceptable bids. The higher the ratio, the more aggressive are the bidders, while a lower ratio indicates that fewer bids are being rejected.

BSP Governor Amando Tetangco Jr. noted the latest auction results indicates ample room to “scale up TDF operations.”

“The results of today’s auction are consistent with our expectation of a gradual narrowing of the gap between the TDF rate and our policy rate. We will continue to review the auction size with the view towards further scaling up the TDF operations going forward,” Tetangco noted in a text message to reporters.

“As you will note, the bid-to-cover ratio has tipped slightly, indicating there is room to do so. We will include these observations at our next policy meeting,” he added.

The BSP awarded the whole P90-billion weekly offering – P10 billion for seven-day facility and P80 billion for the 28-day TDF.

Of the total tenders, P41.27 billion was for the seven-day term deposit, and P187.54 billion for the 28-day facility, reflecting another oversubscribed auction.


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