Term deposit yields mixed on weak demand due to ongoing RTB offer

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) term deposits were mixed on Wednesday, with the one-week tenor going under-subscribed for a second straight week as the government’s ongoing retail Treasury bond (RTB) offer likely cornered some of the market’s excess liquidity.

- Katherine K. Chan

The central bank’s term deposit facility (TDF) fetched bids amounting to P103.771 billion, higher than the P100 billion placed on the auction block and the P88.578 billion for the same volume offered a week earlier. However, the BSP only awarded P88.846 billion in papers as the one-week deposits were undersubscribed.

Broken down, tenders for the seven-day term deposits stood at only P38.846 billion, lower than the P50 billion placed on the auction block but higher than the P31.69 billion in bids seen last week for the same offer volume. The BSP accepted all the submitted bids for the tenor.

Accepted yields were from 5.23% to 5.265%, unchanged from the margin seen the week prior. However, the weighted average accepted rate for the one-week deposits inched up by 0.28 basis point (bp) to 5.2549% from 5.2521% previously.

Meanwhile, the 14-day papers attracted P64.925 billion in bids, well above the P50 billion auctioned off by the BSP and the P56.888 billion in tenders fetched last week for the same offer volume. The central bank fully awarded P50 billion in two-week deposits.

Banks asked for yields ranging from 5.265% to 5.305%, narrower than the 5.25% to 5.33% margin seen last week. This caused the average rate of the 14-day deposits to decline by 1.08 bps to 5.2901% from 5.3009% previously.