THE CENTRAL BANK fully awarded the 28-day bills it offered on Monday as accepted rates went down after the government’s latest bond issuance.
The Bangko Sentral ng Pilipinas (BSP) awarded P140 billion in one-month bills as planned as its offer was oversubscribed, with demand hitting P158.525 billion. However, this was lower than the P186.385 billion in tenders seen on April 12.
The weekly auctions of BSP bills are usually held on Fridays. However, April 15 was a non-working day in observance of Good Friday.
Accepted rates for the one-month securities were from 1.89% to 1.94%, slightly narrower than the 1.89% to 1.9557% margin seen in the previous auction. This caused the average rate of the one-month bill to fall by 1.68 basis points to 1.9144% from 1.9312% previously.
The central bank uses its short-term securities and term deposit facility to mop up excess liquidity in the financial system and guide market rates.
Yields on the 28-day bills declined following the latest global bond issuance of the government, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message on Monday.
The government raised ¥70.1 billion or P29 billion through its multi-tranche offering of sustainable samurai or yen-denominated bonds last week.
The Bureau of the Treasury said proceeds from the issuance will fund climate change mitigation and sustainable development projects.
Mr. Ricafort said the seasonal rise in the government’s tax collections expected this April due to the deadline for filing income tax returns on Monday, which could reduce the need for local borrowings, was also factored in by investors and affected the rates of BSP bills. — L.W.T. Noble