Term deposits mixed ahead of BSP meet

MANILA, Philippines — Term deposits fetched mixed results as yields of the seven-day tenor increased slightly, while rates for the 14 and 28-day debt papers slipped further ahead of the first rate setting meeting of the Bangko Sentral ng Pilipinas (BSP) this year.

The yield of the seven-day term deposits was almost steady at 4.0240 percent at the term deposit auction facility (TDF) yesterday from last week’s 4.0233 percent.

On the other hand, the 14-day tenor fetched 4.0197 percent or two basis points lower than last week’s 4.0397 percent, while the 28-day term deposit rate declined by 3.22 percent to 4.0419 percent from 4.0741 percent.

The liquidity absorption facility was slightly oversubscribed as tenders amounted to P207.8 billion versus the issue size of P200 billion.

The seven-day tenor was undersubscribed as bids only amounted to P66.75 billion or way below the P200-billion volume set by the auction committee.

Both the 14 and 28-day term deposits were oversubscribed as tenders reached P66.75 billion and P76.24 billion, respectively, versus the issue size of P60 billion for each tenor.

BSP Governor Benjamin Diokno said the Monetary Board is likely to resume its easing cycle this year with a 50-basis points rate cut as well as the further lowering of the reserve requirement ratio (RRR).

However, the BSP chief noted monetary authorities may “go slow” on monetary policy easing this year.