TDF rates post mixed results despite huge demand

TDF rates post mixed results despite huge demand

MANILA – The rates of the Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) posted mixed results Wednesday but both tenors were oversubscribed due to the high liquidity situation in the economy, a ranking central bank official said.

Data released by the central bank showed that the rate of the seven-day TDF dipped to 1.7230 percent but the rate of the 14-day facility rose to 1.7546 percent.

These were at 1.7253 percent for the seven-day TDF and 1.7392 percent for the 14-day facility during the auction last May 12.

“The slight uptick in the 14-day rate may have been influenced by the results of last week’s auction,” BSP Deputy Governor Francisco Dakila Jr. said in a statement, referring to the undersubscription in the said tenor in the previous auction.

The BSP maintained the seven-day TDF offer volume at PHP150 billion this week, but reduced the offering for the two-week facility to PHP360 billion from last week’s PHP370 billion.

Both tenors were fully awarded this week.

Bids for the one-week facility reached PHP167.799 billion while it amounted to PHP408.124 billion for the two-week TDF.

In last week’s auction, bids for the seven-day facility reached PHP160.199 billion while tenders for the two-week facility amounted to PHP368.448 billion.

TDF rates last week declined for both tenors.

Amid the uptick in the 14-day TDF rate this week, Dakila said market conditions remain normal as ample liquidity in the financial system is sustained.

“Moving forward, the BSP’s monetary operations will continue to be guided by its latest assessment of prevailing liquidity conditions and market developments,” he added. (PNA)

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