The central bank has tightened its liquidity management by employing the Term Deposit Facility (TDF) and BSP bills. These instruments allow it to absorb excess cash from the market and steer short‑term yields toward the policy rate.
In a move to streamline operations, the bank has narrowed the TDF to a single maturity. This focus on a specific tenor enhances the effectiveness of monetary transmission and reduces operational complexity.
Early June figures show the market operations have taken in roughly P1.3 trillion of excess liquidity. Of that amount, 6.9% was captured through the TDF, illustrating the facility’s role in the bank’s liquidity toolkit.
The strategy aims to maintain stability in the financial system while ensuring policy signals remain clear to market participants.
