• TDF auction results reflect seasonality

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    THE results of the term deposit facility (TDF) auction on Wednesday were widely expected even if they reflect the seasonality in the bid-to-cover ratio, according to the central bank.

    The BSP awarded P130 billion during Wednesday’s auction – P10 billion in the eight-day TDF and P120 billion in the 28-day tenor. It rejected most of the P270 billion of bids.

    The interest rate for the eight-day facility remained at 2.27 percent, while 28-day tenor rose to 2.80 percentfrom 2.8 percent last week.

    “The auction results are as expected,” BSP Governor Amando Tetangco Jr. told reporters in a text message.

    The bid-to-cover ratio for the 28-day TDF decline d to 1.25 percent from 1.72 percent on November 16. The ratio for eight-day also fell to 2.27 percent from 2.95 percent the previous auction.

    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 changes are beginning to reflect seasonality given these tenors would mature close to the holidays,” Tetangco noted.

    Monetary authorities will continue to closely monitor market liquidity conditions to make sure it is sufficient in the run up to the holiday season, he said.

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