MANILA - The rates of the Bangko Sentral ng Pilipinas' (BSP) term deposit facility (TDF) declined on Wednesday and demand remained strong, resulting in continued oversubscription.
Data released by the central bank showed that the average rate of the shorter-tenor facility, which is among the BSP's tools to mop up excess liquidity from the financial system, slipped to 1.7128 percent, and the two-week facility to 1.7259 percent.
These were at 1.7232 percent and 1.7487 percent for the one-week and two-week facilities, respectively, during the auction last January 12.
The BSP hiked the offer volume for both tenors by PHP20 billion to PHP220 billion for the one-week TDF and PHP290 billion for the two-week facility. Both were fully awarded.
Total tenders for the one-week TDF reached PHP253.606 billion, resulting in a bid coverage ratio of 1.1528.
Bids for the two-week facility amounted to PHP449.684 billion, making its bid coverage ratio stand at 1.5506.
BSP Deputy Governor Francisco Dakila Jr. has repeatedly traced the large volume of bids during the TDF auctions so far this year to the normalization of domestic liquidity post-Christmas season.
"Looking ahead, the BSP's monetary operations will remain guided by its assessment of the latest liquidity conditions and market development," Dakila said. (PNA)