BSP to hike weekly TDF offer at P180 billion in December

As the financial systems remains awash with cash and the term deposit facility (TDF) continues to be oversubscribed after twenty-four auctions, the Bangko Sentral ng Pilipinas (BSP) has decided to raise the TDF volume starting December 1.

"We raised the auction size for both facilities for the December auctions as there is still a significant amount of liquidity flowing into our ODF (overnight deposit facility)," BSP Governor Amando Tetangco Jr. said in a text message to reporters on Wednesday.

The BSP will offer P150 billion, 28-day TDF (from P120 billion) and P30 billion,  seven-day TDF (from P10 billion) next month.

"Capturing more liquidity in the longer tenors would help us better manage liquidity in the system," Tetangco noted.

Central bank data showed the seven-day, P10-billion offer received total bids of P29.598 billion at a weighted average, accepted yield of 2.5232 percent.

The bids for the 28-day, P120-billion auction totaled P207.302 billion at a weighted average, accepted yield of 2.7842 percent.

"We noted a decline in the tender amount in the 28-day from about P232 billion last week to about P207 billion this week. This may be due to market positioning ahead of seasonal requirements, given maturity of the 28-day is by mid December already," the central bank chief said.

The TDF is a central bank to manage liquidity in the financial system. Banks and trust entities make a bid for the TDF yield rats which the BSP will pay for them to park their excess funds.

The 30-minute auction is held once a week at 9:20 a.m., with a minimum placement of P10 million. — VDS, GMA News