MANILA, Philippines — Term deposits fetched mixed results as banks swarmed yesterday’s auction in anticipation of additional rate cuts and lowering of the level of deposits banks are required to keep with the Bangko Sentral ng Pilipinas (BSP).
The yield of the seven-day tenor eased by 7.11 basis points to 4.4141 percent from last week’s 4.4852 percent, while the 14-day term deposit rate declined 7.03 basis points to 4.4352 percent from 4.5055 percent.
On the other hand, the 28-day fetched a higher yield of 4.4950 percent, 1.18 basis points higher than last week’s 4.4832 percent.
Banks swarmed the term deposit auction facility (TDF) yesterday as bids reached P76.05 billion or almost double the lowered volume of P40 billion.
Tenders for the seven-day tenor reached P24.9 billion, more than double the lowered volume of P10 billion, while bids for the 14-day term deposits amounted to P22.98 billion, also more than the revised size of P10 billion.
Likewise, bids for the 28-day term deposits amounted to P28.17 billion versus the issue size of P20 billion.
Economist expect the BSP to slash interest rates by at least another 25 basis points this year due to easing inflation and the slower than expected gross domestic product (GDP) growth.
Inflation may fall below two percent for the first time in 33 months with the BSP’s Department of Economics Research (DER) seeing a range of 1.3 to 2.1 percent for August.
The consumer price index averaged 3.3 percent in the first seven months of the year after slipping to a 31-month low of 2.4 percent in July from 2.7 percent in June.