The auction of 28-day Bangko Sentral ng Pilipinas (BSP) securities attracted P135.73 billion bids, 1.36x more than offer of P100 billion.

During Friday’s auction, the average rate of the BSP bills slightly moved up to 1.8158 percent from 1.8109 percent last June 18.

“The weighted average interest rate for the 28-day BSP bill remained generally steady at 1.8158 percent. There was a slight upward shift in the yields accepted during the auction although the range narrowed to 1.800-1.835 percent,” noted BSP Deputy Governor Francisco G. Dakila Jr. 

BSP Deputy Governor Francisco G. Dakila Jr.

The P135.73 billion tenders were lower compared to the previous week’s P140.53 billion. Bid coverage ratio also dropped to 1.3573 from 1.4053.

“The auction results remain in line with current normal market conditions amid sustained ample liquidity in the financial system,” said Dakila.

The BSP securities facility is another of BSP’s liquidity absorbing tools to manage inflation. It was introduced only last September 2020.  

During the first quarter, the BSP has absorbed P2.1 trillion of liquidity or excess money supply.

The BSP’s term deposit facility continue to be its main liquidity-mopping up facility, accounting for 39.4 percent of the total liquidity absorbed or about P827.40 billion. This was followed by the overnight deposit facility which absorbed 31.7 percent or P665.70 billion.   The securities facility only absorbed 14.6 percent of the total excess liquidity or P300.30 billion of the P2.1 trillion.

Source: Manila Bulletin (