MANILA, Philippines — Term deposits were mixed anew yesterday with the yield for the seven and 29-day tenors climbing, while the yield for the 14-day term deposit declined as the latest reduction of the reserve requirement ratio for banks took effect.
The seven-day tenor fetched 4.2834 percent at the term deposit auction facility (TDF,) 3.26 basis points higher than last week’s 4.2508 percent, while the yield of the 29-day term deposits inched up by 1.98 basis points to 4.3522 percent from 4.3324 percent.
On the other hand, the yield of the 14-day term deposits slipped by 1.14 basis points to 4.3310 percent from 4.3424 percent.
The liquidity absorption facility was oversubscribed as the latest 100 basis points reduction in the level of deposits big and mid-sized banks are required to keep with the central bank took effect.
The central bank has lowered the RRR for universal, commercial, and thrift banks by 400 basis points and for small banks by 200 basis points this year as part of its commitment to bring down the level to single digit by 2023 to free up much needed funds to boost economic activity.
Total tenders amounted to P175.53 billion for the three tenors, higher than the lowered volume of P170 billion.
The seven-day term deposits were undersubscribed as bids only amounted to P56.57 billion, lower than the issue size of P60 billion.
Both the 14 and 29-day term deposits were oversubscribed as bids exceeded the issue size of P60 billion and P50 billion, respectively. Tenders for the 14-day tenor reached P67.39 billion, while bids for the 29-day term deposits amounted to P51.57 billion.
Aside from the RRR cuts, the BSP has also slashed interest rates by 75 basis points, partially unwinding a tightening episode that saw rates rise by 175 basis points last year.