P180-B TDF auction undersubscribed


The P180-term deposit facility (TDF) failed to draw enough bids for the longer tenor at the auction on Wednesday, days ahead of the Christmas weekend, as the central bank had expected.

The Bangko Sentral ng Pilipinas (BSP) awarded just more than P143 billion, short of the P180-billion offer.

For the 7-day tenor, bids exceeded the P30 billion offer and reached P64.53 billion, prompting the BSP to award the offer fully.

However, bids for 28-day facility totaled only P137.46 billion – short of the P150- billion offer. The BSP awarded P113.91 billion.

The interest rate for the seven-day facility rose to 3.02 percent from 2.60 percent, while that of the 28-day tenor rose to 3.43 percent from 2.95 percent.

“This week’s auction was undersubscribed, most likely because of banks’ higher liquidity requirements during the Christmas season, with depositors withdrawing more money than usual,” Land Bank of the Philippines market economist Guian Angelo Dumalagan, said.

Moving forward, he said the auction might stay undersubscribed until mid-January next year.

The BSP previously projected the TDF offers to remain undersubscribed until January as banks stock up on cash to make sure they liquid enough to meet the demand for the holidays.

“[I think] it will be until January, then will normalize in February,” BSP Deputy Governor Diwa Guinigundo had said.


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  1. Many cooperatives and savings and loan associations are willing to invest their surplus capitals in short term deposits had they not been restricted by provision of laws regulating them. It is highly suggested that said laws be amended to avail of an important source of investment for economic growth and development. Meantime, due to restrictive laws, these associations are also restricting acceptance of deposits from their members as they have already oversupply of money and they fear they may not be able to pay dividends or interest due their members. They are even lowering interest rates for their members just so to accommodate the earnings from money flow. The latter action contradicts now the very purpose of cooperativism and savings.