Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. on Wednesday said tweaks in bids to the central bank’s term deposit facility (TDF) are expected to be sustained in the coming weeks.
This, after tenders for both the short-term and long-term TDF were more than the offered volume Wednesday, after an undersubscription last week.
Data released by the central bank for this week’s auction showed that the seven-day facility, which was offered for Php 30 billion, received bids amounting to Php 43.569 billion.
Tenders for the 28-day facility reached Php 162.463 billion, higher than the Php 150 billion offering.
Last week, the shorter-term TDF attracted Php 15.865 billion and the longer-term facility, Php 113.214 billion. The seven-day facility was offered for Php 30 billion and the 28-day for Php 150 billion.
This undersubscription is the first time that transpired since TDF started operations last June.
Tetangco, in a text message to reporters, traced the resurgence of bids in this week’s TDF auctions to the rejection by the Bureau of the Treasury (BTr) of the tenders for the Treasury bond (T-bond) offered Tuesday.
The BTr auction committee rejected bids for the four-year debt paper after banks asked for yields of over four percent, higher than the 3.977 percent average it fetched during the auction last November 22.
The ban against trust entities from the central bank’s overnight deposit facilities was another factor for the lower TDF bids, Tetangco said.
Trust entities were ordered to withdraw 50 percent of their placements in the central bank’s overnight deposit facilities (ODFs) as of Sept. 30 this year by end-December 2016. The remaining 30 percent should be withdrawn by end-March 2017 and all placements must be fully withdrawn by June 30 next year.
Tetangco said trust entities “have already hit the required 50 percent winding down of their placements in TDF and ODF by December.”
He said “trusts are already compliant with the 50 percent unwinding, so the maturing funds from seven days and 28 days previously deposited were rolled over,” he said.
“We will likely continue to see refinements in placements in our facilities such as these,” he said.
“Our view remains that there is sufficient liquidity in the system. Nevertheless, we will continue to monitor bank requirements over the holidays,” he added. (PNA)
