THE term deposit facility (TDF) auction was oversubscribed again on Wednesday, after failing to draw enough subscriptions last week, as banks and trust entities realigned their bids, the central bank reported.
The Bangko Sentral ng Pilipinas (BSP) fully awarded the P180-billion TDF. The total bids for the seven- and 28-day facilities reached over P205 billion.
Bids in the seven-day tenor totaled P43.56 billion, while 28-day facility garnered P162.46 billion.
The interest rate for the seven-day facility rose to 2.91 percent from 2.60 percent, while that of the 28-day tenor rose to 3.15 percent from 2.95 percent.
“We saw realignment by banks and trust department, given results of Treasury bond auction yesterday (rejection of tenders),” BSP Governor Amando Tetangco Jr. told reporters in a text message on Wednesday.
The Bureau of the Treasury on Tuesday rejected P25 billion worth bids in its last auction for 2016.
Tetangco said trusts entities have hit the required 50 percent winding down in their TDF and overnight deposit facility placements for December, with “the maturing funds from 7 days and 28 days previously deposited were rolled over.”
To keep the facilities purely as liquidity management tools, the BSP previously announced that trust entities could no longer access deposit facilities as investment outlets starting July next year.
The new rule takes effect on July 1, 2017, but the BSP said the Monetary Board (MB) approved a phased implementation of the restrictions to ensure an orderly transition.
“We will likely continue to see refinements in placements in our facilities such as these. Our view remains that there is sufficient liquidity in the system.
Nevertheless, we will continue to monitor bank requirements over the holidays,” Tetangco added.