Yields of the central bank’s term deposit facility (TDF) were again lower this week while market demand has remained strong, according to Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila Jr.


The BSP raised the TDF volume to P560 billion from P550 billion and allocated the additional P10 billion to the 14-day tenor.

“Both tenors were oversubscribed with the 7-day TDF and 14-day TDF receiving 1.44x and 1.28x their respective volume offerings,” said Dakila. Bids reached P741.81 billion versus the P560 billion offer.

“The weighted average interest rates (WAIR) for both tenors continued to decline from last week’s rates. The 7-day WAIR decreased by 1.056 bps (basis points) to 1.6992 percent. Similarly, the 14-day WAIR fell by 1.631 bps to 1.7654 percent,” said Dakila. The accepted yields for both tenors shifted lower from the previous week. “There was a slight widening in the 7-day TDF to 1.650-1.708 percent while the range remained unchanged in the 14-day TDF to 1.730- 1.779 percent,” he added.

Dakila also said that auction results mirror “normal market conditions amid sustained ample liquidity in the financial system.”

The 7-day TDF was offered at P160 billion, the same as last July 14. Tenders totaled P230.57 billion, up from P215.97 billion previously. The rate was down to 1.6992 percent from 1.7097 percent last week. The bid coverage ratio, in the meantime, stood at 1.4411, more than the 1.3498 previously.

The 14-day TDF was auctioned with a higher volume of P400 billion from P390 billion. Bids totaled P511.24 billion, it was down from P525.25 billion last week. The rate decreased to 1.7654 percent from 1.7817 percent. The bid coverage ratio also fell to 1.7654 from 13468.

Source: Manila Bulletin (https://mb.com.ph/2021/07/21/tdf-rates-continue-to-decline-3/?utm_source=rss&utm_medium=rss&utm_campaign=tdf-rates-continue-to-decline-3)