TDF offer hiked to P110 billion

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has raised the volume of the term deposit facility (TDF) for the third straight week this year as liquidity continues to return to the financial system.

The auction committee decided to increase the TDF offering to P110 billion on Feb. 21 from P80 billion last Wednesday.

The issue size of the seven-day term deposits was raised to P50 billion instead of P40 billion, while the volume of the newly introduced 14-day term deposits was doubled to P40 billion from the initial offer size of P20 billion.

The volume of the 28-day term deposits was retained at P20 billion.

BSP Deputy Governor Diwa Guinigundo said the seven and 14-day term deposits give banks greater flexibility in liquidity management.

Guinigundo said banks also continue to express strong interest in the 28-day term deposits.

“Banks continue to express strong interest in 28-day term deposits to accommodate some of their funds which may not necessarily be needed for short term operations and servicing of their clients’ immediate needs,” he said.

Banks swarmed Wednesday’s auction that was almost two times oversubscribed with bids for the seven, 14-, and 28-day term deposits reaching P150.75 billion or P70.75 billion more than the P80 billion offering.

Bids for the seven-day term deposits amounted to P65.36 billion or more than the P40 billion offering, while tenders for the 28-day term deposits reached P39.93 billion or almost double the issue size of P20 billion.

On the other hand, tenders for the newly introduced 14-day tenor amounted to P45.46 billion or more than double the introductory volume of P45.46 billion.

The yield of the seven-day term deposits eased further to 2.7232 percent from 2.7278 percent last week as accepted rates ranged from 2.6 to 2.8 percent.

The 28-day term deposits also fetched a lower rate of 2.965 percent from 3.0183 percent last week with accepted rates ranging between 2.8 and 3.074 percent.

The central bank temporarily stopped the auction of 28-day term deposits last Dec. 20 due to tight market conditions after the Bureau of Treasury raised P255 billion from the issuance of retail treasury bonds (RTBs) while banks needed more cash for the Christmas holidays.