Term deposits fetch mixed results

MANILA, Philippines — Interest rates on term deposits were mixed in Wednesday’s auction as banks preferred the seven- and 14 days tenors.

The Bangko Sentral ng Pilipinas (BSP) said the yield of the seven-day tenor dipped slightly to 4.7196 percent in yesterday’s auction from 4.7207 percent last week, while the 14-day term deposits fetched a rate of 4.7553 percent or 0.97 percentage points lower than last week’s 4.7650 percent.

On the other hand, the 28-day term deposit rate climbed by 1.31 basis points to 4.8493 percent from 4.8362 percent last week.

The yields of term deposits continued to normalize after hitting record levels amid the series of rate hikes by the central bank in four consecutive rate-setting meetings since May to curb rising inflationary pressures.

Inflation averaged five percent in the first nine months, exceeding the BSP’s two to four percent target.

The P90-billion offering yesterday was oversubscribed as bids tendered by banks across all tenors reached P100.81 billion.

Tenders for the P50 billion seven-day term deposits amounted to P53.64 billion, while bids for the P20-billion 14-day tenor reached P28.51 billion.

On the other hand, the 28-day tenor was undersubscribed as bids amounted to P18.66 billion versus the revised P20 billion volume.