BSP fully awards one-month bills

THE BANGKO SENTRAL ng Pilipinas (BSP) raised P90 billion as planned from its auction of short-term securities on Friday, as rates slipped, reflecting lower US benchmark yields.

The BSP made a full award of the 28-day bills as the offering was oversubscribed by 1.46 times, with demand hitting P131.976 billion. The total tenders also surpassed the P114.176 billion in bids seen in the previous auction.

Accepted rates for the one-month securities ranged from 1.8375% to 1.875%, lower than the 1.85% to 1.9050% band logged in the previous offering.

This caused the average rate for the 28-day bills to inch down by 2.33 basis points to 1.8562% from the 1.8795% quoted in the April 12 auction.

The central bank uses its short-term securities and term deposit facility to gather excess liquidity from the market and to guide short-term rates.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the lower yields for the BSP bills on Friday tracked the recent decline in rates of US bonds.

The 10-year US Treasuries yield dropped to 1.529%, a five-week low, on Thursday and last stood at 1.578%, off its 14-month high of 1.776% set at the end of March, Reuters reported.

Mr. Ricafort added that the Friday’s auction results “still manifested lingering excess liquidity in the financial system”. — L.W.T. Noble