BSP bills fetch mixed rates

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) short-term securities ended mixed on Friday as the one-month tenor went undersubscribed.

The BSP bills fetched bids amounting to P119.385 billion, higher than the P110-billion offer but below the P136.922 billion in tenders for the same volume offered the week prior. However, the central bank awarded just P102.285 billion in short-term securities as the one-month tenor was undersubscribed.

“The 28-day tenor had a bid-to-cover ratio of 0.85 times, while the 56-day tenor was 1.29 times oversubscribed,” the BSP said in a statement.

Broken down, tenders for the 28-day BSP bills stood at just P42.285 billion, lower than the P50 billion on offer and the P61.221 billion in bids for the same volume auctioned off the prior week. The BSP awarded all the submitted bids.

Accepted rates ranged from 5.299% to 5.525%, lower than the 5.35% to 5.536% band seen a week earlier. This caused the average rate of the one-month securities to slip by 0.08 basis point (bp) to 5.4654% from 5.4662% previously.

Meanwhile, bids for the 56-day bills amounted to P77.1 billion, above the P60-billion offering and the P75.701 billion in tenders for the same amount offered by the central bank a week prior. The central bank made a full P60-billion award of the two-month securities.

Banks asked for yields ranging from 5.32% to 5.515%, wider than the 5.375% to 5.546% margin seen a week prior. With this, the average rate of the 56-day securities rose by 1.11 bps to 5.4965% from the 5.4854% logged in the previous auction.

The central bank uses the BSP securities and its term deposit facility to mop up excess liquidity in the financial system and to better guide short-term market rates towards its policy rate.

The BSP bills also contribute to improved price discovery for debt instruments while supporting monetary policy transmission, the central bank said.

The central bank securities were calibrated to not overlap with the Treasury bill and term deposit tenors also being offered weekly.

Data from the central bank showed that around 50% of its market operations are done through its short-term securities.

The BSP bills are considered high-quality liquid assets for the computation of banks’ liquidity coverage ratio, net stable funding ratio, and minimum liquidity ratio. They can also be traded on the secondary market. — Luisa Maria Jacinta C. Jocson

BSP bills fetch mixed rates
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