BSP fully adjudicates short-term effects


CENTRAL BANK fully allocated its 28-day bond offering on Friday, with yields falling amid strong investor appetite for safe assets amid concerns over the Delta variant of coronavirus disease 2019 (COVID-19) .

The Bangko Sentral ng Pilipinas (BSP) on Friday allocated 100 billion pesos as expected in one-month bills. Demand reached 162.51 billion pesos, lower than the 186.61 billion pesos in tenders seen in the previous auction.

Lenders have asked for yields ranging from 1.745% to 1.7705%, down from the 1.77% to 1.789% band recorded in last week’s auction. This lowered the average one-month paper rate by 2.42 basis points to 1.7602% from 1.7844% previously.

BSP bills and the term deposit facility are used by the central bank to pool excess liquidity in the financial system and steer market rates.

Yields on BSP securities have declined amid demand for safe-haven securities amid tighter government-imposed restrictions amid an increase in Delta variant infections in the country, Rizal chief economist said Commercial Banking Corp. Michael L. Ricafort.

The high bids for BSP securities also reflect excess liquidity in the financial system, Ricafort added.

Presidential spokesman Herminio L. Roque, Jr. said on Friday that metro Manila would be placed under general community quarantine “with increased restrictions” until July 31.

There were 47 recorded cases of the Delta variant in the Philippines as of Thursday, where eight are active while three have died. – LWT Noble

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