The auction of Bangko Sentral ng Pilipinas (BSP) 28-day securities continued to be oversubscribed with a rising yield, according to BSP Deputy Governor Francisco G. Dakila Jr.

The BSP offered P100 billion BSP bills last Friday, and it received P140.53 billion tenders. The bids were lower compared to June 12 tender at P162.69 billion. The bid coverage ratio this week was 1.4053, lower than last week’s 1.6269.

BSP Deputy Governor Francisco G. Dakila Jr.

“The BSP kept the offering in the 28-day bill auction at P100 billion which it awarded in full amid good demand,” said Dakila. Total bids were about 1.41x the offered amount.

The weighted average interest rate continued to rise, increasing by 1.444 basis points to 1.8109 percent from 1.7965 percent.

“The modest increase in the 28-day bill rate remains in line with market participants’ search for yield in the longer tenor,” said Dakila. The yields accepted  shifted higher but narrowed to a range of 1.780-1.845 percent, he added.

BSP Governor Benjamin E. Diokno said last week that they “continue to study the possibility of introducing another tenor” for the BSP bills.

Since its first offering in September 2020, there was just one tenor, the 28-day, which used to be the 28-day term deposit facility, another of BSP’s liquidity absorbing facilities. Diokno said market sentiment has improved as indicated by high oversubscriptions in the primary auctions for government securities and the BSP’s TDF and reverse repurchase facility.

Source: Manila Bulletin (