MANILA The rates of Bangko Sentral ng Pilipinas' (BSP) term facilities declined Wednesday in the face of greater submissions from banks.
Data released by the BSP showed that rate of the sevenday Term Deposit Facility (TDF) went down to 4.9333 percent and the 14day facility to 4.9969 percent.
These were at 4.9831 percent and 5.0567 percent for the sevenday and 14day facilities during the auction last March 27.
On the other hand, bid coverage ratio on both facilities inched up after tenders nearly doubled compared to the previous auction.
BSP offered the sevenday TDF for PHP20 billion and bids reached PHP40.46 billion, also higher than last week's PHP22.985 billion tenders. The auction committee made a full award.
With the increase in bids the facility's bid coverage ratio improved to 2.0230 from 1.1493 last week.
Bids for the 14day facility amounted to PHP22.573 billion, more than twice the PHP10 billion offer and higher than last week's PHP14.14 billion. This was fully awarded.
Its bid coverage ratio rose to 2.2573 from the previous auction's 1.4140.
Monetary officials have said that the bids for the TDF facilities are expected to be on a seesaw depending on how banks foresee the liquidity demand of their clients.
It has been observed that banks normally offer smaller bids during TDF auctions before extended holidays so they will be better able to meet bank clients' demand for cash.
Relatively, banks' higher bids this week can also be attributed to the central bank's decision not to offer the 28day TDF.
For the auction on April 10, the BSP will still offer two tenors namely the sevenday for PHP20 billion and the 14day for PHP10 billion.
Source: Philippines News Agency