The yield of the seven-day term deposits rose to 3.693 percent from 3.5866 percent last year, while the 14-day tenor fetched a higher rate of 3.6683 percent from 3.5783 percent.
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Term deposit rates up across the board
Lawrence Agcaoili (The Philippine Star) - May 31, 2018 - 12:00am

MANILA, Philippines — Term deposit rates rose across the board yesterday ahead of the scheduled reduction in the reserve requirement ratio of banks on June 1.

The yield of the seven-day term deposits rose to 3.693 percent from 3.5866 percent last year, while the 14-day tenor fetched a higher rate of 3.6683 percent from 3.5783 percent.

Likewise, the rate of the 28-day term deposits also rose to 3.6431 percent from 3.5716 percent.

Banks continued to calibrate their bids after the central bank raised benchmark rates for the first time in more than three years last May 10.

Inflation kicked up to a fresh five-year high of 4.5 percent in April from 4.3 percent in March due to rising oil prices and the impact of the implementation of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

This brought the average inflation to 4.1 percent in the first four months, exceeding the two to four percent target set by the central bank. The BSP now expects inflation to average 4.6 instead this year and 3.4 percent next year.

The term deposit auction facility (TDF) was oversubscribed yesterday as bids amounted to P121.09 billion versus the offer size of P110 billion.

The 14-day tenor was oversubscribed at P46.97 billion versus the issue size of P40 billion, while bids of the 28-day term deposits reached P25.91 billion versus the P20 billion offering.

On the other hand, the seven-day tenor was undersubscribed as bids only reached P48.21 billion against the volume of P50 billion.

TAX REFORM FOR ACCELERATION AND INCLUSION TERM DEPOSIT RATES
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