P180-B TDF oversubscribed, reflects healthy liquidity – BSP

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The central bank said its P180 billion offer of term deposit facility (TDF) was oversubscribed at Wednesday’s auction, indicating that the country’s liquidity system remains sound and that investors continue to favor short-dated papers.

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The Bangko Sentral ng Pilipinas (BSP) fully awarded the P180-billion TDF offer. The total bids for the seven- and 28-day facilities exceeded P208 billion.

Bids on the seven-day tenor totaled P37.87 billion, while the 28-day facility drew P171.3 billion.

“The auction results show there is still good demand for short-dated TDF placements (seven days and 28 days) even as the bid-to-cover ratios are lower than last week’s,” BSP Governor Amando Tetangco Jr. told reporters in a text message.

The bid-to-cover ratio compares the number of total bids with the acceptable bids. The higher the ratio, the more the auction is considered oversubscribed.

The bid-to-cover ratio of 1.2625 and 1.1420 for the seven-day and 28-day tenors, eased from 1.7023 and 1.3603, respectively.

“There continues to be oversubscription and the rates were still on a downtrend,” Tetangco said.

The interest rate for the seven-day facility dropped to 3.00 percent from 3.01 percent, while that for the 28-day tenor fell to 3.39 percent from 3.40 percent last week.

“Investors remain on the lookout for short-dated paper with good yields,” Tetangco added.

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