Mixed results in TDF auction

MANILA, Philippines — Term deposits fetched mixed results during yesterday’s auction as the shrinking excess liquidity in the financial system prompted the Bangko Sentral ng Pilipinas (BSP) to slash anew the volume of the term deposit auction facility (TDF) this month.

The six-day term deposits (instead of seven-day in lieu of the Nov. 1 holiday) fetched a higher rate of 3.3548 percent from 3.3546 percent last week with accepted rates ranging from 3.3 to 3.45 percent.

On the other hand, the yield of the 27-day (instead of 28 days) term deposits slipped anew to 3.494 percent from last week’s 3.4925 percent as accepted yields ranged between 3.45 and 3.5 percent.

BSP Deputy Governor Diwa Guinigundo said the market remains short-term biased, but pointed out there were more maturing 28-day term deposits due to the reduction in the volume of offering.

“On the six days, it’s the extended holidays,” he said referring to the Oct. 31 and Nov. 1 holidays.

Bids for the P130 billion offering only reached P121.15 billion. The shorter-dated term deposits with a volume of P40 billion was undersubscribed as tenders amounted to only P30.53 billion while the longer-dated term deposit was slightly oversubscribed with bids for the P90 billion offering amounting to P90.62 billion.

Last week, the BSP auction committee decided to reduce the size of the weekly auction of term deposits to P130 billion starting Nov. 2 from P140 billion.