YIELDS on the Bangko Sentral ng Pilipinas’ short-term securities fell further on Friday as investors continued to show strong demand for the central bank’s liquidity management instruments.
Total bids for its reached P151.63 billion, exceeding its P100-billion offer though slightly below last week’s P171.6 billion in tenders for a P110-billion sale. The central bank fully awarded both the 28- and 56-day bills.
Bids for the 28-day securities reached P60.05 billion, above the P40-billion offer but less than the P84.1 billion in the previous week. Rates ranged from 4.8% to 5.23%, leading the average yield to decline by 5.72 basis points (bps) to 5.1793%.
Demand for the 56-day bills hit P91.58 billion, higher than the P60-billion offer and last week’s P87.5 billion in tenders for a P70-billion sale. The accepted rates ranged from 4.9% to 5.24%, pulling the average yield down by 6.78 bps to 5.1887%.
Both tenors were oversubscribed, with bid-to-cover ratios of 1.5 times for the 28-day bills and 1.53 times for the 56-day tenor, the BSP said.
The central bank uses the facility and term deposit auctions to absorb excess liquidity and align short-term market rates with its benchmark policy rate.
The BSP noted that the bills enhance price discovery for short-term debt instruments and strengthen monetary policy transmission. These securities are classified as high-quality liquid assets and may be traded in the secondary market.
About half of the BSP’s market operations now take place through its short-term securities. Governor Eli M. Remolona, Jr. earlier said the central bank plans to gradually reduce reliance on such debt to encourage greater activity in the domestic money market.— Katherine K. Chan
