Term deposit rates rise across the board

MANILA, Philippines — Term deposit rates rose across the board as Metro Manila and nearby provinces were reverted back to stricter modified enhanced community quarantine due to the rising number of COVID-19 cases.

The yield of the seven-day tenor inched up by 0.06 basis point to 1.7540 percent from last week’s 1.7535 percent, while that of the 14-day term deposits increased by 0.23 basis point to 1.7570 percent from 1.7543 percent.

Likewise, the rate for the 28-day term deposits went up by 0.61 basis point to 1.7660 percent from 1.7594 percent.

BSP Deputy Governor Francisco Dakila Jr. said banks continued to park their excess funds in the term deposit facility (TDF) auction amid ample liquidity in the financial system despite the Retail Treasury Bond (RTB), offering by the national government.

“The sustained strong market demand for the TDF ahead of the settlement date of the Bureau of the Treasury’s five-year RTBs, as well as the return to tighter quarantine measures in the National Capital Region indicates that liquidity in the financial system remains ample,” Dakila said.

He said that tenders reached P526.49 billion, higher than the increased volume of P380 billion.

Bids for the seven-day tenor amounted to P196.23 billion, higher than the P140 billion volume, while tenders for the 14-day term deposits reached P247.36 billion versus ahe increased P180 billion.

Likewise, tenders for the 28-day term deposits amounted to P82.89 billion versus the lowered volume of P60 billion.

“Looking ahead, the monetary operations will remain guided by its assessment of market developments and liquidity conditions,” Dakila said.

The Philippine Statistics Authority (PSA) yesterday reported that inflation accelerated for the second straight month to hit a six-month high of 2.7 percent in July from 2.5 percent in June.

Inflation averaged 2.5 percent from January to July, lower than the mid-point of the two to four percent target set by the BSP for the year.