TDF yield slips before CPI data

THE AVERAGE YIELD on the Bangko Sentral ng Pilipinas’ (BSP) term deposits continued to slip week on week as demand for safer assets remained strong, with rate hike bets growing as inflation likely stayed elevated last month.

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Bids for the term deposit facility (TDF) amounted to P157.445 billion on Wednesday, exceeding the P90 billion placed on the auction block and the P141.071 billion in tenders for the same volume of seven-day papers auctioned off last week.

This translated to a higher bid-to-cover ratio of 1.7494 times from the 1.5675 ratio logged last week.

With this, the BSP awarded its entire P90-billion offer as it noted in a statement that the “auction saw good demand.”

Accepted rates for the one-week papers slightly narrowed to the 4% to 4.4665% range from 4% to 4.477% in the previous auction. This caused the average accepted rate of the seven-day deposits to slip by 0.42 basis point week on week to 4.4388% from 4.443%.