Term deposit rates down

MANILA, Philippines — Term deposit rates eased across the board amid strong demand ahead of today’s rate setting meeting of the Bangko Sentral ng Pilipinas (BSP).

The yield of the seven-day tenor slipped by 1.23 basis points to 4.5844 percent from last week’s 4.5967 percent, while the 14-day term deposits fetched a higher rate of 4.6176 percent or 3.72 basis points lower than 4.6548 percent last week.

Likewise, the yield of the 28-day tenor shed 8.2 basis points to 4.6033 percent from 4.6853 percent.

Banks swarmed the liquidity absorption facility as bids amounted to P123.42 billion versus the lowered volume of the term deposit auction facility (TDF) at P80 billion.

Tenders for the seven-day term deposits amounted to P37.19 billion versus the issue size of P30 billion, while bids for the 14-day tenor reached P44.43 billion compared the P30-billion volume.

Likewise, tenders for the 28-day term deposits amounted to P41.8 billion or more than double the P20 billion volume.

The BSP is widely anticipated to slash interest anew today after Bangko Sentral ng Pilipinas Governor Benjamin Diokno hinted the monetary authorities may cut interest rates by 50 basis points until the end of the year due to easing inflation.

The BSP’s hit the pause button last June 20 to assess the impact of previous monetary actions including the reduction of interest rates by 25 basis points last May 9 as well as the lowering of the reserve requirement ratio by 200 basis points for big and mid-sized banks and 100 basis points for small banks.

“The BSP will keep a close watch over latest economic developments to ensure that the monetary policy stance remains consistent with the BSP’s price stability objective while being supportive of economic growth,” Diokno said.