Treasury bonds hit TDF auction further

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THE P180-billion term deposit facility (TDF) auction failed to draw enough bids for on Wednesday as the retail treasury bonds (RTBs) offered by the national government (NG) continue to impact on the central bank’s liquidity mopping tool.

The Bangko Sentral ng Pilipinas (BSP) awarded more than P170 billion during the auction, short of the total P180 billion on offer.

“The undersubscription in the TDF and the relatively higher uptick in auction rates are not with surprise in light of the successful RTB auction, which continued to indicate market appetite for relatively short dated paper with good value,” BSP Governor Amando Tetangco Jr., said in a text message to reporters.

Bids reached P21.35 billion for the P30-billion, 7-day tenor while bids for the P150-billion, 28-day tenor reached P149.92 billion.


The interest rate for the seven-day facility rose to 3.0487 percent from 2.9970 percent, 28-day tenor to 3.4208 from 3.3746 percent.

“As the funds generated in the RTB will eventually end up funding projects of the NG, we do not see this take up by the NG as causing undue tightness in liquidity,” Tetangco said.

“Nevertheless, we will monitor liquidity conditions to see if there is need to make adjustments in the operational features of the TDF and/or other measures,” Tetangco said.

The Bureau of the Treasury is expected to announce the final results of its RTB offering today. The bonds were offered from March 28 up to April 6 (today). The national government initially raised P70 billion at the start of the offer period.

“The facility remains effective in mopping up liquidity from the system and ensuring consistency with growth and inflation targets,” BSP Deputy Governor Diwa Guinigundo said.

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