Term deposit rates rise anew

MANILA, Philippines — Yields of term deposits rose across the board anew on Wednesday as overall liquidity conditions remain adequate to support the country’s economic growth requirements.

The Bangko Sentral ng Pilipinas (BSP) yesterday said the seven-day term deposit rate inched up slightly to 4.5679 percent from last week’s 4.5640 percent, while the yield of the 14-day tenor climbed 1.29 basis points to 4.6277 percent from 4.6148 percent.

Likewise, the yield of the 29-day tenor increased slightly to 4.6495 percent from 4.6492 percent last week.

However, the term deposit auction facility (TDF) was undersubscribed as bids only reached P66.22 billion versus the P80-billion offering.

Bids for the seven-day term deposits amounted to P27.75 billion versus the issue size of P30 billion, while tenders for the 14-day tenor reached P16.77 billion compared to the P30-billion volume.

On the other hand, tenders for the 29-day term deposits amounted to P21.7 billion, slightly above the P20-billion issue size.

BSP Governor Benjamin Diokno told members of the European Chamber of Commerce of the Philippines the overall domestic liquidity conditions remain adequate as the liquidity-to-gross domestic product (GDP) ratio stood at 64.2 percent for the first quarter of the year.

“The country still has ample liquidity to accommodate the growth of economic activity, even if M3 (money supply) growth is more modest today,” Diokno said.

Latest data from the BSP showed domestic liquidity growth eased to 6.4 percent to about P11.7 trillion in end-May from seven percent in April.

Diokno said loan demand remains healthy across sectors as growth to most economic sectors continued to post double-digit rates. Bank lending grew at a slower rate of 11.9 percent in May from 12.7 percent in April.

“The sustained expansion of economic activities in the country has led to higher demand for loans across key economic sectors as reflected in the continued increase in bank lending,” Diokno said.