The central bank on Wednesday raised its volume offer for the term deposit facility (TDF) auction under the Interest Rate Corridor (IRC) in response to good demand.
The increase was for the 28-day tenor. It was hiked to P60 billion from P40 billion. The volume for 7-day tenor remained at P10 million. Thus the total TDF offer set for auction on August 3 is P70 billion. It is the second increase in the TDF volume offer since the program began in June.
BSP Governor Amando Tetangco Jr. said the BSP would continue to adjust the auction size, “as market conditions warrant.”
Meanwhile, the BSP also on Wednesday awarded 50-billion worth of its TDF—P10 billion in the seven-day tenor and P40 billion in the 28-day tenor—rejecting most of the over P170 billion tenders for the liquidity management tool under the IRC.
Of the total tenders, P48.4 billion was for the seven-day term deposit, and P129.4 billion for the 28-day term deposit—far exceeding the P10 billion and P40 billion set respectively for the auction.
The offer was oversubscribed with the auction priced at an average of 2.5 percent for both tenors.
“The auction results continue to show that there is good liquidity in the system, with both tenors being filled at 2.5 percent with substantial over subscription,” Tetangco said.