Term deposit rates fetch mixed results

MANILA, Philippines — Term deposits fetched mixed results yesterday as rates for the six- and 13-day debt papers increased, while the yield for the 27-day debt paper declined.

The yield of the six-day term deposits increased by 2.08 basis points to 4.4597 percent from 4.4389 percent last week, while the 13-day tenor fetched a higher rate of 0.33 basis point to 4.4938 percent from 4.4905 percent.

On the other hand, the yield of the 27-day tenor eased by 3.48 basis points to 4.4613 percent from 4.4961 percent.

The term deposit auction facility (TDF) was slightly oversubscribed with tenders reaching P102.99 billion versus the volume of P100 billion.

The adjusted six-day tenor was undersubscribed as bids only amounted to P35.82 billion compared to the issue size of P40 billion, while the tenders for the 13-day term deposits reached P26.05 billion versus the P30-billion volume.

On the other hand, the 27-day tenor was oversubscribed with bids reaching $41.12 billion compared to the issue size of P30 billion.

BSP Deputy Governor Francisco Dakila Jr. said the oversubscription of the 27-day tenor reflected banks’ appetite for longer-tenored term deposits.

At the same time, Dakila said the results of the auction indicated banks’ preference to hold on to their cash in view of the long weekend and month-end liquidity requirements.

“Nonetheless, the total tenders received across all TDF tenors at about P103 billion were in line with the BSP’s liquidity forecast for the week,” he said.

Dakila said the oversubscription continued to reflect higher liquidity in the financial system coming from higher national government subscription.

Dakila said liquidity also came from the decision of the BSP to lower the level of deposits banks are required to keep with the central bank.