Rate of one-month BSP debt paper slips further at auction – BusinessWorld Online
YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) one-month securities fell on Friday amid strong demand.
Total bids of the BSP 28-day bills reached P129.481 billion, more than the P100 billion auctioned off but below the P131.672 billion in tenders last week. The BSP awarded the entire P100 billion.
This led to a bid-to-cover ratio of 1.3x, according to a result summary posted by the central bank on its website.
Accepted rates were 4.95% to 5.049%, wider than 4.975% to 5.07% in the previous auction. This brought the average rate of the one-month securities to 5.0156%, down by 1.8 basis points.
The BSP did not offer the 56-day bills at Friday’s auction for the third week in a row. It last put up for sale both the 28-day and 56-day BSP bills on Oct. 24.
At the Oct. 24 auction, the total offer volume for both tenors stood at P85 billion, with bids hitting P125.798 billion.
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 toward its policy rate.
The BSP bills also contribute to improved price discovery for debt instruments while supporting monetary policy transmission, the regulator has said.
The central bank started auctioning off short-term securities weekly in 2020, initially offering only a 28-day tenor and adding the 56-day bill in 2023.
In August, BSP Governor Eli M. Remolona, Jr. said they are gradually shifting away from the issuance of short-term debt to manage liquidity as they try to boost activity in the money market.
Data from the central bank showed that about 50% of its market operations are done through its short-term securities. — Katherine K. Chan
