Term deposits fetch mixed results

MANILA,Philippines — Short-dated term deposits fetched mixed results yesterday as the seven- and 14-day term deposit rates declined, while the 28-day tenor fetched a higher yield as banks held on to excess funds due to the long weekend.

The yield of the seven-day term deposits slipped to 4.2053 percent at the term deposit auction facility yesterday from last week’s 4.2055 percent, while the 14-day tenor fetched a lower rate of 4.2451 percent from 4.2477 percent.

On the other hand, the yield of the 28-day tenor increased by 4.06 basis points to 4.2886 percent from 4.2480 percent.

Bangko Sentral ng Pilipinas Deputy Governor Francisco Dakila Jr. said the volume of the liquidity absorption facility for this week was reduced due to the All Saints’ Day and All Souls’ Day public holidays.

“The reduction in the offer volume considered the higher cash demand expected this week due to the public holiday and the long weekend,” Dakila said.

The facility was slightly oversubscribed as tenders amounted to P82.1 billion versus the lowered volume of P80 billion.

Bids for the seven-day term deposits reached P30.2 billion versus the issue size of P30 billion, while bids for the 14-day tenor amounted to P22.92 billion compared to the P20-billion volume.

On the other hand, the 29-day tenor was undersubscribed as tenders only reached P28.98 billion, lower than the issue size of P30 billion.

“There was a slight undersubscription in the 28-day tenor, nevertheless, bid rates received continue to reflect healthy demand for the tenor,” Dakila added.

The BSP’s Monetary Board has slashed the level of deposits big and mid-sized banks are required to keep with the central bank by 100 basis points effective the first week of December.