The Bangko Sentral ng Pilipinas (BSP) said its P180 billion offer of term deposit facility (TDF) was undersubscribed during Wednesday’s auction, warranting a careful analysis of the trend to see if any policy setting must adjusted.
Out of the P180-billion offer, the central bank awarded only more than P124 billion.
The 28-day TDF was undersubscribed anew, attracting only P89.14 billion. The BSP awarded only P89.14 billion against the P140 billion weekly offer.
The seven-day tenor was also undersubscribed at P35.23 billion, prompting the BSP to award P35.23 billion, compared to the P40 billion offer.
The interest rate for the seven-day facility rose to 3.2597 from 3.2189, while the yield for the 28-day tenor rose to 3.4948 from 3.4892 percent.
“We need to carefully analyze today’s TDF auction results as well as the trend of recent results, whether the results are readily explained by temporary and self-correcting reasons or we should already consider refinements to some of our policy settings,” Bangko Sentral Governor Nestor Espenilla Jr. told reporters in a message via Viber.
The BSP overnight borrowing rate is currently 3.0 percent, and the overnight lending is 3.5 percent. The central bank also pays 2.5 percent for deposit facilities.
TDF is one of the liquidity-mopping tools introduced by the BSP last year to develop an active and more dynamic policy tool to improve its influence on market rates and ultimately enhance monetary policy.