THE BANGKO SENTRAL ng Pilipinas (BSP) fully awarded its offer of one-month securities on Friday as its yield went down after the central bank said it still has policy space to support the economy.
The BSP raised P110 billion as planned from its auction of 28-day bills on Friday.
The offer was oversubscribed, with demand reaching P148.05 billion. However, this was below the P144.79 billion in bids recorded at last week’s auction.
Accepted rates for the papers ranged from 1.7125% to 1.7275%, slimmer than the 1.71% to 1.7305% margin seen on Aug. 27. This caused the average rate of the one-month bills to dip by 0.17 basis point (bp) to 1.7194% from 1.7211% previously.
The short-term securities and the term deposit facility are tools used by the BSP to mop up excess liquidity in the financial system.
The average yield on the one-month BSP bills slipped after the central bank said will keep its monetary policy stance supportive of growth as the country faces an “economic slack”, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.
BSP Governor Benjamin E. Diokno said in an online briefing on Thursday that the central bank has ample space to remain accommodative.
“The BSP believes that the current accommodative policy settings should be allowed to continue to work their way through the economy to bolster the recovery in private consumption and investment,” Mr. Diokno said.
The central bank kept benchmark rates unchanged in its previous review held on Aug. 11 as it acknowledged risks from the reimposition of strict lockdowns caused by a surge in infections. The Monetary Board will have its next policy review on Sept. 23. — LWTN